Intel is planning to reduce its workforce in response to a decrease in market share. The company’s quarterly financial report is set to be released on August 1, which led to a 1% increase in its stock price. Intel’s stock has seen a decline of about 40% this year. The company currently employs around 110,000 people, excluding those in separate units. Although Intel continues to be a major player in the PC and server market, it is encountering challenges in meeting the growing demand for chips used in artificial intelligence (AI) applications. CEO Pat Gelsinger has adapted the company’s strategy to focus on restoring production capacity, investing in advanced chip technology, and expanding into new markets to gain a competitive edge.
As part of a cost-cutting plan announced in October 2022, Intel aims to reduce annual costs by $3 billion by 2023. The company’s workforce decreased from 131,900 at the end of 2022 to 124,800 in 2023, and it expects annual cost savings of $8 billion to $10 billion by 2025. Analysts predict that the company’s second-quarter revenue will be similar to the same period last year, with declines in the data center and AI sectors totaling 23%.
Investors are also looking to the Joe Biden administration to boost chip production in North America, diversify the supply chain, and reduce dependence on Taiwanese chip firms, which could have positive implications for Intel’s development prospects.