Over the past year, tech giants like Alphabet, Microsoft, Amazon, and Spotify have started to do without more than 70,000 workers. In January, the announcements of job cuts multiplied and now it is Intel, the processor maker gone down, that has to make the adjustments.
The company would then seek to cut costs and address the sharp deterioration in the PC market, which according to Gartner dropped by 19.5% in the third quarter of 2022; the steepest decline in more than two decades. IDC also forecast a 15% decline in this market on Monday.
That’s 201 jobs at the company’s Santa Clara headquarters and a couple of layoffs in Sacramento, totaling 176, and 167 layoffs at the Folsom R&D campus, spread across two lots, totaling Of 544 jobs lost in California and only in this case.
The global economic slowdown and growing uncertainty have prompted Intel to discuss a “significant number” of layoffs, among other cost-cutting measures, as it aims to cut $3 billion from its annual budget this year and up to $ 10 billion. million by 2025.
After the surge in the pandemic, where the demand for technological devices, especially computers and tablets, for teleworking and distance learning has skyrocketed, consumer spending in the second half of this year is feeling the effects of geopolitical tensions .
But it is not the only cause to upset the balance. At the World Economic Forum in Davos, business and political leaders highlighted the energy crisis, the war in Ukraine, skyrocketing inflation, the slowdown of the international economy and the Covid before the reopening of China as the main problems for the tech industry .
Compared to layoffs of up to 10% of the workforce at other companies, Intel’s plan to lay off 544 of its 120,000 workers estimated (0.5%) is an extraordinarily small measure, as analyzed in Techradar. While this is a reasonably “significant” number, there is still the potential for further layoffs in other regions.
a latent threat
In addition to cutting staff, Intel has also budgeted for many of its other operations. The Register notes the cancellation of a $200 million plan for a development center in Israel, as well as other moves by the company to cut spending, such as offering Irish-based manufacturing workers three months of voluntary retirement without pay.
Pat Gelsinger, the multinational’s CEO, has struggled since taking over in early 2021 to restore the company to its former glory as a cutting-edge chipmaker. That means developing new manufacturing capabilities within the company, which while they made sense during the global chip shortage, will also impact margins and profitability.
The new layoffs are likely aimed at cutting Intel’s fixed costs, possibly by 10-15%, and making the company more efficient, notes Bloomberg Intelligence analyst Mandeep Singh. He estimates that these costs range from at least 25,000 and 30,000 million dollars.
Linda Price is a tech expert at News Rebeat. With a deep understanding of the latest developments in the world of technology and a passion for innovation, Linda provides insightful and informative coverage of the cutting-edge advancements shaping our world.