Intel is preparing for a mass layoff which may affect at least 15,000 employees in the company. The company intends to take measures to reduce costs as Pat Gelsinger stated in an internal memo sent to the workers. As per the reports, the company aims to cut costs saving $10 billion by 2025 which would enhance financial performance. The dismissed employees may receive a retirement offer and other departure benefits.
Intel’s CEO Pat Gelsinger stated in the internal memo that the decision is painful but there is no other way to reduce costs as the company’s margins are too low. This is considered the hardest day in Intel’s history as the company makes one of the most difficult but mandatory changes, he added.
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Earlier this week, Bloomberg reported that Intel Corporation plans to reduce thousands of jobs to cope with AI demand and finance a recovery as Intel stocks have sunk 40 per cent this year. Pat Gelsinger acknowledged that Intel is set to focus on the competitive side to round off its manufacturing capabilities. Intel plans to invest in multiple advanced chip technologies and expand its business into other fields.
Before the emergence of AI and its growing demand, Intel was known for its dominance in the computer niche. It gradually confronted plights to keep pace with the AI race as the need for AI Chips used in several applications. As per the regulatory filings, Intel revealed a cost-reduction plan laying off-chip makers from 131,900 to 124,800 by the end of 2023 on account of the cost reduction plan and to provide anticipated outcomes saving an annual cost between $8 billion-$10 billion.
This will further support to encourage chip manufacturing in North America which will dwindle the dependence on Taiwan and diversify supply chains. Intel is putting effort into expanding its business by making chips for other companies along with its notion to design advanced AI chips.
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