Intel Lays Off 15,000 Employees; Amidst Strategic Restructuring
Intel lays off announcement: The company hopes to reduce its spending by 17 percent annually to $21.5 billion by 2025. But now the company is doing layoffs to reduce expenses. Intel said most of the layoffs would be completed by the end of the year.
Image Credits- Tech Wire Asia
Chip manufacturer Intel announced on Thursday that it plans to lay off 15,000 of its employees. The move is a worrying sign for the Biden administration’s billion-dollar plan to revive the chip manufacturing industry in the US.
Intel said this layoff will affect more than 15 percent of its workforce. This announcement was made at a time when Intel CEO Pat Gelsinger told investors and employees that the company had suffered a loss of $ 1.6 billion in the second quarter. After this loss, the company needs a massive restructuring to cut costs.
Intel’s CEO, Pat Gelsinger, stated in a press release, “This is a difficult but necessary decision reflecting our commitment to making Intel a more agile and efficient company. Our priority is to position ourselves for long-term success and innovation in an increasingly competitive landscape”
The restructuring plan includes workforce reductions and a reallocation of resources towards key growth areas such as artificial intelligence, cloud computing, and advanced chip technologies. The company aims to accelerate its transition to more advanced manufacturing processes and strengthen its market leadership in these critical sectors.
Intel reported in its second-quarter financial results that its second-quarter revenue was $12.8 billion, which is 1% less than last year. The company earned $0.02 per share on a non-GAAP basis, compared to a loss of $0.38 per share on a GAAP basis.
Intel says that this step is being taken keeping in mind its long-term goals. The company recently announced its IDM 2.0 transformation plan, which plans to improve operating and capital efficiency using the new operating model.
This layoff by Intel has also raised questions on the chip manufacturing plan of the Biden administration. This could be a major blow to plans to revive the American chip manufacturing industry. It is expected that these steps of Intel will take the company towards financial stability, but it will hurt many families. It remains to be seen to what extent these steps of the company take it in the direction of restructuring and stability.
Impact on Employees
The layoffs will affect employees across Intel’s global offices, with a significant number concentrated in the United States. Intel has assured that affected employees will receive severance packages, career transition services, and other support to help them through this period of change.
“We understand the impact of this decision on our employees and their families,” Gelsinger added. “We are committed to providing the necessary support to ensure a smooth transition for those affected.”
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