After reporting $1.6 billion net loss for the second quarter of 2024 Intel plans reduce costs by $10 billion by next yr. On Thursday, the tech giant announced layoffs that can affect greater than 15,000 people, or about 15% of Intel’s current workforce.
IN Thursday Note to staff, Intel CEO Pat Gelsinger said revenue didn’t grow as much as expected and Intel “has not yet fully benefited from powerful trends like AI.”
“Our costs are too high and our margins are too low,” Gelsinger wrote.
Intel’s latest plan calls for streamlining the business and focusing it on projects with the best impact. The company will “reduce layers, eliminate overlapping lines of responsibility” and “discontinue non-essential work,” in keeping with the memo. Gelsinger cited the example of merging the customer success team into the sales, marketing and communications group.
“This is a difficult day for all of us, and there are more difficult days ahead,” Gelsinger wrote. “But as difficult as this is, we are making the changes necessary to build on our progress and usher in a new era of growth.”
He also mentioned that almost all of the layoffs would occur by the end of the yr.
Intel CEO Pat Gelsinger. Photo: Annabelle Chih/Bloomberg via Getty Images
One of Intel’s goals is to introduce its “AI in all placesAI products including AI computera wider audience. The company also wants to expand production capabilities in the US and the EU.
Intel has already cut about 5,000 jobs between March and June, but those layoffs are ongoing. not included in a latest 15% reduction.
When it involves AI chip market share, Intel lags behind industry leader Nvidia. Bank of America Analysts They say Intel will have lower than 1% market share, while Nvidia will have 70-95%.
Intel didn’t work 55% since the starting of the yr at the time of this writing.