Intel Targets 35% Cost Reduction in Sales and Marketing Group, Bracing for Tough Times Ahead

[AleksandarK]

Intel's Sales and Marketing Group (SMG) has announced a 35% reduction in costs as the company looks to streamline operations and adapt to challenging market conditions. The cuts, revealed during an all-hands meeting on August 5th, will impact both jobs and marketing expenses within the SMG. Intel has directed the group to "simplify programs end-to-end" by the end of the year, a directive that comes on the heels of the company's announcement that it would lay off 15% of its global workforce to save $10 billion in operating expenses. "We are becoming a simpler, leaner, and more agile company that's easier for partners and customers to work with while ensuring we focus our investments on areas where we see the greatest opportunities for innovation and growth," Intel said in a statement to CRN. The company emphasized that this restructuring is about "building a stronger Intel for the future," with partners integral to its plans.

The job cuts within the SMG are expected to target overlapping responsibilities, such as account managers and industry-focused teams, which can confuse customers navigating Intel's complex organization. Additionally, the company plans to significantly reduce its marketing budget and simplify programs, aiming to save at least $100 million in the latter half of 2024 and an additional $300 million in the first half of 2025. The impact will also be felt in Intel's market development fund (MDF), a crucial tool for supporting OEMs and other partners through events, training, and more. An ex-Intel executive warned that the MDF had become vital as the company's product leadership waned, allowing it to maintain valuable relationships with partners. As Intel navigates these changes, its partners are bracing for the impact, with one CEO describing the situation as everyone "hunkering down and just waiting to hear something." Another partner executive expressed concerns about Intel's ability to maintain the level of service and support its customers have come to expect.



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[Deleted member 229121]

Honestly going back to basics will be good for them, their branding has been absolutlely atrocious.

 

[TomWeng]

Too many Key Opinion Leader

 

[RimbowFish]

I think at the end, they will sell their foundry business like AMD did

 

[oxrufiioxo]

Honestly going back to basics will be good for them, their branding has been absolutlely atrocious.

Hopefully that is the case, Arrow Lake/Lunar Lake being a hit would be a good first step but getting the vibe Intel is preparing for it only being ok.

 

[phanbuey]

I think at the end, they will sell their foundry business like AMD did

You might be right...

But I think they know the foundry business is the ticket to government interest, so I don't think that would be their best move.

 

[kapone32]

The Govt should ask them back for the Money they gave them. This Company is like Chelsea FC in so many ways.

 

[Onasi]

“The impact will also be felt in Intel's market development fund (MDF), a crucial tool for supporting OEMs and other partners through events, training, and more. An ex-Intel executive warned that the MDF had become vital as the company's product leadership waned, allowing it to maintain valuable relationships with partners.”

Look, I understand this is a nature of business, but I just love how this reads like poetry, but describes, essentially, just good old fashioned bribes. Amusing, is all, don’t really have anything else to comment on here. And yes, I understand that this isn’t pure bribery… hopefully? Were those “incentives” people like to accuse Intel of providing to OEMs included under MDF?

 

[kapone32]

I think at the end, they will sell their foundry business like AMD did

Don't they have foundries like everywhere?

 

[Steevo]

Global recession after the hyperinflation of Covid money printing.

I miss 3% interest and $2 fuel, not paying for wars or the rest of the world.

 

[oxrufiioxo]

You might be right...

But I think they know the foundry business is the ticket to government interest, so I don't think that would be their best move.

Me either, although if things keep going like the last couple of years for them it wouldn't surprise me because they likely won't have a choice but AMD/Intel getting into a bidding war for TSMC isn't going to be good for the consumers we will just end up with more expensive products.

Still they are nowhere near in as dire situation AMD was pre 2016 and they turned it around partially thanks to TSMC sure but eventually all these Foundry companies are going to hit a wall.

 

[phints]

Tough times ahead? Does that mean Arrow Lake and Lunar Lake are a bust this year?

 

[R0H1T]

That's not gonna happen, if TSMC can raise prices for Apple they can do it for anyone else & I doubt Intel/AMD get anywhere close to Apple/Nvidia (QC?) volumes.

AMD/Intel getting into a bidding war for TSMC isn't going to be good for the consumers

Although they do have a "choice" with Sammy or Intel if they're so desperate for volumes

 

[ScaLibBDP]

I think at the end, they will sell their foundry business like AMD did

Let's see what the Future will look like for Intel.

My understanding is Intel actually wants to get rid of, or scale down, all Groups Not related to a Foundry Business and continue operations in a way TSMC and Samsung Foundries work. Intel top-level executives dream about having NVIDIA, AMD and ARM as primary clients of the Foundry Business.

 

[oxrufiioxo]

Tough times ahead? Does that mean Arrow Lake and Lunar Lake are a bust this year?

Alderlake was good and still struggled compared to older generations sales wise so I don't think this has anything to do with that.

Intel also has to prove it doesn't have the same issue raptorlake does. Also these cpu's look complicated to make so margins might be pretty low if they price competitively

 

[john_]

Let's see if some Youtube channels change their perspectives.

 

[oxrufiioxo]

That's not gonna happen, if TSMC can raise prices for Apple they can do it for anyone else & I doubt Intel/AMD get anywhere close to Apple/Nvidia (QC?) volumes.


Although they do have a "choice" with Sammy or Intel if they're so desperate for volumes

While that might have worked out ok for Nvidia due to their name recognition and given how inferior samsungs process node was Ampere was actually pretty decent but I doubt AMD/Intel could make a competitive product using their node. Love to be wrong as TSMC could use some real competition.

I'm not an expert on process nodes by any means but Samsung seems way behind both intel/tsmc currently. Maybe I'm wrong but that's the impression I get at least for high powered/high clocking chips.

 

[DavidC1]

Still they are nowhere near in as dire situation AMD was pre 2016

Intel has $46 billion debt with $50 billion revenue meaning it's almost bad as the US itself in terms of debt ratio in an era where interest rates are again quite high, while facing a very serious quality issue with bread and butter client product line 2 years worth and their tech is behind in both design and process.

The Raptorlake degradation issue is huge as they were reluctant to address it until 2 years after the introduction of the product. Client with $30 billion in revenue was the only bright spot in the company and that's where it's getting hit.

Alderlake was good and still struggled compared to older generations sales wise so I don't think this has anything to do with that.

That's not really true. Alderlake mobile suffered because the battery life degraded significantly compared to predecessor. However during the collapse of revenue it was the Desktop sector which proved to be a bright spot because it took shares away from AMD. It prevented their collapse from being worse.

Global recession after the hyperinflation of Covid money printing.

I miss 3% interest and $2 fuel, not paying for wars or the rest of the world.

Yea, we're forced to pay all these taxes and work endlessly while all the government has to do is get new supply of paper and run it through it's printers.

Can't believe Intel didn't pay their debt and used it to do share buybacks and dividends. These companies have zero contingency plans.

 

[kapone32]

Before we call Doomsday, the mitigating factor for all of this News from Intel is their Stock price lost 27% in one day. They have to ensure that people want to put them back in their portfolio.

 

[Pumper]

Global recession after the hyperinflation of Covid money printing.

I miss 3% interest and $2 fuel, not paying for wars or the rest of the world.

So you want covid lockdowns gas prices without the lockdowns? That's a nice pipe dream.

 

[R0H1T]

I'm not an expert on process nodes by any means but Samsung seems way behind both intel/tsmc currently.

That maybe the case right now but eventually they'll run into the same physics wall that TSMC will need to overcome. Just like Intel vs AMD (IPC) debate or Intel vs TSMC about half a decade back, the differences at the very top of the ladder are marginal at best. The biggest differentiator at that point could be yields, now whether that happens 5 years in the future or 10 who knows? But Sammy will catch up to TSMC at some pint in time.

 

[kapone32]

So you want covid lockdowns gas prices without the lockdowns? That's a nice pipe dream.

The narrative is strong.

 

[oxrufiioxo]

That's not really true. Alderlake mobile suffered because the battery life degraded significantly compared to predecessor. However during the collapse of revenue it was the Desktop sector which proved to be a bright spot because it took shares away from AMD. It prevented their collapse from being worse.

Funny you said that, battery life is the reason I went with a Ryzen 6000 laptop over a 12900hx based one due to battery life even though the Intel part was more perfomant

Yeah it's a shame amd hasn't capitalized on that more a lot of their products haven't been available in volume on laptop for whatever reason.

Still amd was in bad shape in 2014/15 and they still bounced back losing 100s of millions per quarter back then.

Hopefully this is the wake up call intel needs.

 

[john_]

I think at the end, they will sell their foundry business like AMD did

Only if they fail to produce valid nodes. In that case they might try to sell their fabs to save themselves from a bankruptcy. But if they manage to fix their nodes, they have no reason to sell their fabs. They expect to become the next TSMC, meaning they wouldn't care as much if x86 loses to ARM, they wouldn't care if the best GPUs keep coming from Nvidia, because they might be producing most of those chips. Also having fabs means you can warranty capacity, the reason why AMD can't brake it into OEMs. AMD probably can't supply as many CPUs/APUs as Dell for example wants. If Intel sells it's fabs, it will lose a huge advantage over AMD and everybody else. Not to mention the now almost impossible possibility they become again the leader in chip manufacturing, meaning having again an extra advantage over the competition.

 

[Vya Domus]

This is quite fascinating because their revenue figures are still huge, twice as much as Nvidia or AMD for last year, this means all that money that their getting their hands on is grossly mismanaged.