Intel Corporation announced significant workforce reductions, planning to lay off approximately 15,000 employees, or 15% of its global workforce, as part of a broader initiative to achieve $10 billion in cost savings by 2025. The layoffs, which will primarily occur by the end of this year, were disclosed in a message from CEO Pat Gelsinger following the company’s second-quarter earnings report.
Gelsinger addressed employees in an all-company meeting, emphasizing the need for Intel to align its cost structure with a new operating model amidst financial challenges and a competitive market landscape. “Our revenues have not grown as expected, and our costs are too high. We need bolder actions to address both,” he stated.
The restructuring includes several key priorities:
Intel aims to enhance efficiency across the company, focusing on streamlining operations and reducing expenses.
Business units will undergo portfolio reviews to identify and eliminate underperforming products.
The company plans to consolidate overlapping functions and automate processes to expedite workflows.
Intel will cut its 2024 capital expenditures by over 20% and reduce non-variable costs by roughly $1 billion in 2025.
To prioritize business investments, Intel will suspend its stock dividend starting next quarter.
These changes come as Intel seeks to adapt to market conditions and continue its IDM 2.0 strategy, which focuses on re-establishing process technology leadership, expanding manufacturing capacity, and delivering AI innovations.
“The world will increasingly run on silicon, and the world needs a healthy and vibrant Intel,” Gelsinger concluded, underscoring the importance of the company’s transformation efforts.