Friday, October 28th 2022
Intel Looking to Lay Off Meaningful Numbers of Staff, Can Some Products, After Profit Slump
Intel's third quarter financials that the company released yesterday, weren't exactly what you'd call stellar. This has put Intel CEO Pat Gelsinger in a bind, as he's been forced to announce cost cuts of US$3 billion annually, starting 2023, but that it'll grow to somewhere between US$8 to 10 billion by 2025. Although Gelsinger didn't reveal the specifics of what these cost cuts will entail, he did mention quite a few potentials, according to The Register. Gelisinger stated that Intel "need to balance increased investment in areas like leadership in [technology development], product, and capacity [at new plants under construction] in Ohio and Germany, with the efficiency measures elsewhere as we drive to have best in class structures."
Intel's CFO David Zinsner, told Barron's that the company will be cutting a "meaningful number" of employees from Intel's payroll. Zisner went on to say that Intel will also perform "portfolio cuts, right-sizing our support organizations, more stringent cost controls in all aspects of our spending, and improved sales and marketing efficiency". It sounds like almost no-one is safe at Intel, especially as portofolio cuts mean that some product lines will either be sold off, or simply just canned in favour of more profitable products. Intel is also betting hard on its IDM 2.0 strategy, where the company is decoupling its hardware and software design teams from its foundry business. Time will tell if this helps restart Intel as a business, but Gelsinger seems to believe that the changes he's implementing at Intel will help turn things around.
Sources:
The Register, Barrons
Intel's CFO David Zinsner, told Barron's that the company will be cutting a "meaningful number" of employees from Intel's payroll. Zisner went on to say that Intel will also perform "portfolio cuts, right-sizing our support organizations, more stringent cost controls in all aspects of our spending, and improved sales and marketing efficiency". It sounds like almost no-one is safe at Intel, especially as portofolio cuts mean that some product lines will either be sold off, or simply just canned in favour of more profitable products. Intel is also betting hard on its IDM 2.0 strategy, where the company is decoupling its hardware and software design teams from its foundry business. Time will tell if this helps restart Intel as a business, but Gelsinger seems to believe that the changes he's implementing at Intel will help turn things around.
81 Comments on Intel Looking to Lay Off Meaningful Numbers of Staff, Can Some Products, After Profit Slump
I am very surprised intel has been doing so poorly. Amd took only what, 20 - 25% cpu market share in 5 years of zen? And the CHIPS act means Intel gets free money to build fabs in the US. The same speculation in AMD and NVDA the last year never benefitted Intel which sat at a PE of about 15 throughout the pandemic free money boom. Now qe is over and interest rates are rising, Intels been left in the dust.
One of the most egregious things in all of this is when Gelsinger was speaking before congress, he was basically extorting the taxpayers with threats that if Intel doesn't get this blank check from the taxpayers, Intel will build the fab somewhere else...obviously the part that isn't being said is that it's attempted extortion based upon a threat of retaliation....if congress had any morals or spine, they would have responded to that threat by saying, "If Intel DOESN'T build that fab in America, the IRS is going to go through Intel's Financials with a fine toothed comb and make sure that every penny of taxes owed to the government is accounted for and that any subsidies or tax breaks Intel already receives will be rescinded immediately"....
Trying to sell those new voodoo cores took a lot of funds :laugh:
If typical eng job is 100k (ish) his salary alone is about 1730 employee's. Those morals/ethics give engineers a bad name. Stuff like that makes me want to boycott their stuff. Not saying other corps are angels, but usually layoffs come when bleeding cash/not making profits. Also kind of a slap in the face to the rest of the country, whose tax dollars bailed out a bunch of corps/execs back in 2008/2009.
The problem with 6-figure salaries is that it tends to make most people think they are indispensable, which is (99.999999%, or even 100% if you are willing to let some kinks in the definition go) never the case. When people getting 6-figure salaries get sacked it's surprised Pikachu-face time i.e., 'OMG, why was I sacked? I did so much for that company', 'They would not be here now if it was not for me!', 'I gave my life for this company!', etc.
SanFran, 100k a year, probably be living in a shack. Monaco a cardboard box lol
Even after these layoffs many fresh engineers will gladly want to join intel (or any other company for that matter), hoping to make a quick buck or a career boost. In either way the company that hires them wins.Which it is! More so, it gets in the pesky category of OPEX, which all companies dread more than the Devil itself dreads a crucifiction!True! If you think a mil or two would get you anywhere among the Swiss elite for example, you are so wrong. 'Big Guy' club for the Swiss starts north of $15m, so a Lambo or two won't impress anyone there.
-Intel CEO Pat Gelsinger
This looks like a bad move for Intel. It's gonna generate a lot of negativity, both inside and outside the company.