Chipmaker Intel Corp is planning to reduce workforce in thousands to cut costs and cope with a sputtering in the personal computer market, according to a Bloomberg report citing people with knowledge of the situation. It added that the layoffs will be announced this month.
The company, which had 1,13,700 employees as of July, is planning to make the announcement around the same time as its third-quarter earnings report on October 27, the Bloomberg report said. Analysts are predicting a third-quarter drop of about 15 per cent in revenue. Its margins are about 15 percentage points narrower than historical numbers of around 60 per cent. In July, Intel warned that 2022 sales would be about $11 billion lower than it previously expected.
The report also said some divisions, including Intel’s sales and marketing group, might see cuts affecting about 20 per cent of staff. Intel has some of its PC processors, which is its main business, to rivals like Advanced Micro Devices and is trying to regain it. However, it is currently witnessing a steep fall in demand.
“We are also lowering core expenses in the calendar year 2022 and will look to take additional actions in the second half of the year,” the report said quoting Intel Chief Executive Officer Pat Gelsinger.
In 2016, Intel trimmed about 12,000 jobs, or 11 per cent of its total.
Other tech companies, including Google, Meta, Oracle, Twitter, Nvidia, Snap, Uber, Spotify, Intel and Salesforce, that have also either laid off employees or slowed hiring in the current economic downturn.
Last month, Google CEO Sundar Pichai also hinted at job cuts if the company does not become 20 per cent more efficient. This comes weeks after Google executives reportedly warned its employees to work harder or be prepared to leave as “there will be blood on the streets” if the next quarterly earnings are not as per expectations.
Pichai said that he hopes to make Google 20 per cent more efficient, as he tackles issues including economic challenges and rapid hirings over many years. Addressing the Code Conference in Los Angeles, Pichai shared details on how the company was planning to be more efficient amid economic uncertainty and a broader slowdown in ad spending.
Pichai had in July told employees that they must improve productivity due to fierce economic headwinds. He said he wanted to get ideas from employees to get “better results faster”.
In July, Microsoft also cut jobs spanning a variety of groups including consulting and customer and partner solutions dispersed across geographies. The layoffs affected less than 1 per cent of its workforce, spanned across groups ranging from consulting and customer and partner solutions and were dispersed across geographies. This was done as the company realigned business groups and roles after the close of its fiscal year on June 30.
Again, in August also, Microsoft asked around 200 more employees to go, this time from one of its customer-focused R&D projects.
In India also, several start-ups, including Unacademy, Byju’s, Ola, and Vendantu, in recent months laid off employees to cut costs and focus on profitability.
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