Intel plans to cut 15,000 jobs, or about 15% of its workforce, CEO Pat Gelsinger said in a note to employees on Thursday.
The mass layoffs come amid a push to deliver $10 billion in cost savings by 2025, after the chipmaker reported “disappointing” second-quarter results.
“This is painful news for me to share,” Gelsinger said. “I know it will be even harder for you to read. This is an incredibly difficult day for Intel as we are making some of the most important changes in our company’s history.”
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” he continued. “Our revenues haven’t grown as expected – and we haven’t yet fully benefited from powerful trends like AI.”
Intel generated revenue of $12.8 billion in the second quarter of 2024, down 1% from the previous year and below expectations for the company. It also reported a net loss of $1.6 billion, or 38 cents per share.
“Our costs are too high, our margins are too low,” Gelsinger added in his note to employees. “We need bolder action to address both – especially given our financial results and the outlook for the second half of 2024, which is more difficult than previously expected.”
In addition to the layoffs, the company also plans to simplify its portfolio to focus on “fewer, more impactful products”, reduce capital expenditures and suspend its stock dividends to “prioritize investments in the business and generate more sustained profitability”, said the CEO.
This story originally appeared on thehill.com read the full story
