Intel Slashes Jobs Amid CPU Scandal in Desperate Attempt to Recoup Value
Intel’s rough times have gotten worse. Intel is cutting thousands of jobs to reduce its costs in hopes of instigating a market share value rebound.
According to Bloomberg, Intel plans to “eliminate thousands of jobs” to reduce its costs, and the workforce reduction could be announced as soon as this week.
Intel is slated to release its second-quarter earnings tomorrow, August 1, and employs around 110,000 people. The company’s market share remains extremely high across multiple computing segments. Still, Intel’s once-dominant position has continually eroded in recent years as competitors like AMD and Nvidia have made up ground. Nvidia, in particular, has experienced tremendous success in recent years, primarily fueled by developments in AI processing technology.
Intel, the one-time most valuable American chip maker, now has a market cap of just one-sixteenth that of Nvidia’s, and Intel is currently smaller than competitors like Qualcomm, Broadcom, AMD, and Texas Instruments despite maintaining a large share of the PC CPU market.
At the time of writing, Intel’s share price is $30.76, up just over two percent since the market opened this morning. However, it has dropped a whopping 35.7% since January.
CNBC described Intel’s first-quarter earnings as “dismal” in April, adding that Intel had earned the dubious title of “worst-performing tech stock” in the S&P 500 so far in 2024.
The rumored job cuts at Intel come after the company reduced its workforce by 5% last year, and join other cost-cutting measures that Intel has said could save the company $10 billion by 2025.
Intel hired its current CEO, Pat Gelsinger, in 2021 and just this week added another executive, Naga Chandrasekaran, from Micron Technology Inc., to lead the company’s manufacturing efforts.
One of Gelsinger’s most significant moves at the helm has been to build factories to manufacture semiconductors for other chipmakers, which has required substantial financial outlay. As CRN explains in a breakdown of Gelsinger’s “biggest moves” as Intel’s CEO, the cost requirements of Intel’s fabrication plans have led the company to narrow its money-making endeavors, seemingly rendering some of the company’s employees unnecessary.
Financial analysts believe Intel’s overall strategy may work, resulting in an expected annual revenue increase for 2024, the company’s first since 2021.
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