11.9 C
London
Saturday, November 26, 2022

Intel (INTC) layoffs threaten as chipmaker plans major budget cuts: report

Must read

Biden eases sanctions on Venezuela as talks resume with opposition

WASHINGTON — The Biden administration eased some oil sanctions against Venezuela on Saturday in a bid to bolster resumed negotiations between President Nicolás Maduro's...

A new wave of Solo GP VCs is coming to Europe and Hypernova hopes to power it • londonbusinessblog.com

The US has had solo VC fund managers for many years, but the trend is only starting to catch on in Europe. One...

Amazon’s latest Kindle Paperwhite is still available for Black Friday price

Despite the arrival of Amazon's latest entry-level Kindle, the Kindle Paperwhite remains the best value in Amazon's current Kindle range. Fortunately, you can...

Efficient growth? No problem, say startups • londonbusinessblog.com

Welcome at the londonbusinessblog.com Exchange, a weekly newsletter for startups and markets. It is inspired by the daily londonbusinessblog.com+ column from which it...
Shreya Christinahttps://londonbusinessblog.com
Shreya has been with londonbusinessblog.com for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider londonbusinessblog.com team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

News broke late last night that Intel is reportedly preparing to lay off potentially thousands of workers in what would be the biggest round of job cuts at the chipmaker since 2016. report comes from Bloomberg, citing people familiar with the situation, but Intel has not yet publicly commented on its plans. Here’s what you need to know.

  • What is going on? late Tuesday, Bloomberg released a report that Intel was preparing “a major workforce reduction,” which could see “thousands” of jobs disappear. The news sent shivers through a tech industry that has been plagued by layoffs in recent months; Understandably, the report is a major concern for Intel employees. If the report is correct, the job losses will likely be the biggest since the chipmaker laid off about 12,000 workers in 2016 — and about 12% of its workforce.
  • How many jobs could be lost at Intel this time? If the report is correct, Bloomberg says job losses will likely be “in the thousands.” In July 2022, Intel had 113,700 employees. If the company matched the job losses in 2016, 12% of its current workforce would equal nearly 14,000 employees. However, there is no suggestion yet that job losses could be the same.
  • Are certain jobs more likely to disappear than others? That is unknown. But Bloomberg reports that certain divisions at Intel, such as the sales and marketing group, could see about 20% of the workforce leave.
  • Why is Intel likely to cut jobs? In short, the profit is not great. Most recently, in July, Intel warned that earnings for the current fiscal year could be $11 billion lower than the company had originally anticipated. The company’s margins have also shrunk.
  • Why are Intel’s profits falling? There is not one factor, but rather a storm of bad externalities. One element is that PC sales are falling. Since Intel makes most of the chips in PCs, that’s bad news for the company. IDC reported that PC sales fell 15% year-over-year in the last third quarter. It also doesn’t help that Apple, previously a major Intel customer, is now making its own chips for its Macs. But Intel also sees significant competition from other PC chip makers such as Nvidia and AMD. And recently, the technology Intel can sell to China may be hampered by new export restrictions announced by the White House last week.
  • What has Intel said about the reported layoffs? Contacted by londonbusinessblog.com, an Intel spokesperson declined to comment. Intel has not announced any job cuts yet. Earlier this year, however, Intel CEO Pat Gelsinger said, “We are also reducing core costs in calendar year 2022 and will take additional actions in the second half of the year.” Job cuts may be one of those “extra actions”.
  • How could the layoffs affect Intel investors? Bloomberg notes that Intel may also lower its stock dividend to bolster its cash flow; however, such a move is not yet a conclusion.
  • How did the layoff report affect Intel stock? The news of expected layoffs hasn’t affected the stock much. However, at the time of writing, INTC stock is up 1% in pre-market trading, suggesting investors see layoffs as a way to boost the company’s profits.

This post has been updated with Intel’s response.

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest article

Biden eases sanctions on Venezuela as talks resume with opposition

WASHINGTON — The Biden administration eased some oil sanctions against Venezuela on Saturday in a bid to bolster resumed negotiations between President Nicolás Maduro's...

A new wave of Solo GP VCs is coming to Europe and Hypernova hopes to power it • londonbusinessblog.com

The US has had solo VC fund managers for many years, but the trend is only starting to catch on in Europe. One...

Amazon’s latest Kindle Paperwhite is still available for Black Friday price

Despite the arrival of Amazon's latest entry-level Kindle, the Kindle Paperwhite remains the best value in Amazon's current Kindle range. Fortunately, you can...

Efficient growth? No problem, say startups • londonbusinessblog.com

Welcome at the londonbusinessblog.com Exchange, a weekly newsletter for startups and markets. It is inspired by the daily londonbusinessblog.com+ column from which it...

Why you should only start a business while you have a job

Opinions expressed by londonbusinessblog.com contributors are their own. Many people I meet tell me that they dream of starting their own business. I always...