Intel to lay off over 17,500 workers

Most of them will lose their jobs this year. In addition, starting in Q4 2024, the company will suspend dividend payments and significantly reduce administrative, R&D, and marketing expenses. Intel’s management wants to reduce costs by $10 billion in this way in order to regain financial stability. In Q2 this year, the company reported a loss of $1.6 billion.

As of June 29, Intel had 116,500 employees, excluding some subsidiaries. The job cuts will affect 15% of that number, with the focus being administrative workers. “I need fewer people at headquarters and more people supporting customers in the field” – said Pat Gelsinger, Intel CEO, in an interview with Reuters.

Intel is currently in the middle of a turnaround plan. Given the decline in sales of traditional semiconductors to data centers, the company wants to focus on developing advanced AI processors and expanding its manufacturing capabilities, in a move that aims to regain the technological advantage it lost to Taiwanese giant TSMC and NVIDIA.

“The $10 billion cost-cutting plan shows that management is willing to take decisive and drastic measures to fix the problems. But we all wonder if it’s enough and if it’s not a bit too late, given that Intel’s CEO has been at the helm for more than three years.” – commented Michael Schulman, investment director at Running Point Capital.

Intel shares fell 20%, Reuters reports. That caused the chipmaker to lose more than $24 billion in market value.

What about Intel’s investment in Poland?

Let us recall that in June last year Intel announced a billion-dollar investment in the Semiconductor Integration and Testing Plant in Miękinia near Wrocław. The project is to employ at least 2,000 highly qualified workers. Additional jobs will also be created for contract workers and subcontractors who will supply the new factory.

According to the Polish Investment and Trade Agency, plans to build this plant have not changed. “We do not see any threats to Intel’s announced investment near Wrocław. We are in good, ongoing contact with the investor and we do not see any changes in the planned implementation” – commented Marcin Graczyk, PAIH spokesman, in an interview with PAP.