Agencies
California-headquartered technology major Intel announced that it will lay off 15 per cent of its global workforce in a bid to streamline its operations and reduce costs. The layoff is expected to affect as many as 17,500 employees, and may begin as early as this week, say media reports.
The company employs 116,500 people as of June 29. Between October 2022 and the end of 2023, Intel had laid off 5 per cent of its workforce.
India hosts Intel’s largest design and engineering centres outside the US, and hence the job cuts are expected to affect its employees in Bengaluru and Hyderabad as well, if reports are to be believed. The Intel centres in these two cities have as many as 13,000 employees.
Intel has also decided to suspend its dividend starting in the fourth quarter. However, the company said it is planning to pay a competitive dividend over time.
"By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet,” Intel chief financial officer David Zinsner has been quoted as saying.
The chip giant, which has been witnessing a dip in revenues and profits, and facing stiff competition from the likes of Nvidia, in an earnings release said its "Q2 financial performance was disappointing, even as we hit key product and process technology milestones.”
Second-half trends are more challenging than we previously expected, Intel chief executive Pat Gelsinger said.
"I need less people at headquarters, more people in the field, supporting customers,” Reuters quoted Gelsinger as saying while speaking about the job cuts.
Further, the company predicted that its third-quarter revenue would be below market estimates.
Intel has been struggling as businesses turn to rivals such as Nvidia, known for its powerful AI chips.
The company said sales fell 1% year-on-year in the three months to June and warned that the second half of the year would be worse than expected.
"Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI,” chief executive Pat Gelsinger wrote in a memo to staff.