The move follows a series of earlier cuts, signaling the company's broader efforts to streamline its structure in the face of weaker demand and tougher competition, CRN reported. The layoffs were announced alongside Intel's announcement of a new financial reporting structure.
More than 50 employees were laid off in Intel's latest round of layoffs.
Confirmation of the cuts came from a company spokesperson in Santa Clara, California, who called the reorganization a strategic move to achieve operational excellence. The representative also stressed that Intel will support all employees through this difficult process and treat those affected with dignity and respect.
The company did not say exactly how many employees were laid off, but the number would be significant given Intel’s $7 billion operating loss last year. The only numbers Intel disclosed were individual layoffs affecting 50 or more employees over a 30-day period at its California offices, as required by the state’s Worker Adjustment and Retraining Act (WARN).
Jason Kimrey, vice president of partner and commercial business for Intel North America, said he believes partnerships remain a key element of the company’s strategy. He emphasized the company’s commitment to continuing to invest in growing and supporting its partner network, despite ongoing organizational changes.
The cuts are part of a plan to reduce the company’s costs by $10 billion by 2025, announced by CEO Pat Gelsinger in the fall of 2022. The plan comes as a sharp decline in demand has forced the company to rethink its financial strategy and cost structure, forcing it to split its product development and chip manufacturing businesses. The goal of the initiative is to turn the foundry division into a separate business unit that can compete with TSMC and Samsung.
The maximum operating loss for the Intel Foundry manufacturing unit is expected to occur in 2024. This coincides with the company’s increasing efforts to accelerate the development and deployment of new technology processes. The unit is expected to achieve operating breakeven by 2027, with a gross margin of 40% and an operating margin of 30%. These figures reflect the company’s ambitious goals of strengthening its market position and achieving financial stability.
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