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After reporting a $1.6 billion net loss for Q2 2024, Intel is aiming to cut costs by $10 billion by subsequent 12 months. On Thursday, the tech big introduced layoffs affecting greater than 15,000 individuals, about 15% of Intel’s present workforce.
In a Thursday memo to employees, Intel CEO Pat Gelsinger mentioned that income hadn’t grown as a lot as anticipated and that Intel had “but to totally profit from highly effective developments, like AI.”
“Our prices are too excessive, our margins are too low,” Gelsinger wrote.
Intel’s new plan includes streamlining its companies and narrowing its focus to the tasks with essentially the most influence. The corporate will “cut back layers, get rid of overlapping areas of duty” and “cease non-essential work,” per the memo. Gelsinger gave the instance of bringing the client success group into the gross sales, advertising, and communications group.
“It is a powerful day for all of us and there shall be extra powerful days forward,” Gelsinger wrote. “However as tough as all of that is, we’re making the adjustments mandatory to construct on our progress and usher in a brand new period of progress.”
He additionally talked about that almost all of the layoffs will occur by the tip of the 12 months.
Intel CEO Pat Gelsinger. Photographer: Annabelle Chih/Bloomberg through Getty Pictures
One in every of Intel’s targets is to convey its “AI Everywhere” AI merchandise, together with the AI PC, to a wider viewers. The corporate additionally desires to broaden manufacturing capabilities within the U.S. and EU.
Intel has already lowered employees by about 5,000 from March to June, however these layoffs are not included within the new 15% lower.
In terms of AI chip market share, Intel lags behind business chief Nvidia. Bank of America analysts say Intel could have lower than 1% of the market, in comparison with Nvidia’s 70% to 95%.
Intel was down 55% year-to-date on the time of writing.
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