According to foreign media, US chip maker Intel is planning to lay off thousands of employees to reduce costs and regain market share.

01 Foreign media reports

According to foreign media reports, Intel plans to launch a layoff plan of thousands of people this week to reduce costs and fund efforts to rebound from declining profits and market share.

People familiar with the plan revealed that the layoff plan may be announced as early as this week. In addition, Intel is scheduled to release its second-quarter financial report on Thursday (August 1st) Eastern Time.

Currently, Intel has about 110,000 employees, a figure that does not include employees of departments that are about to be split off.

It is understood that since taking office in February 2021, Intel's current CEO Pat Gelsinger has begun to invest heavily in research and development, aiming to improve Intel's technology and help it regain its dominance in the semiconductor industry. Prior to this, Intel's market dominance had been eroded, and competitors including AMD had already caught up and seized a portion of the market share. In the chip field, other chip manufacturers led by Nvidia have also long gained an advantage in semiconductor development.

02 Current situation in Intel

Currently, Intel's main business faces uneven demand for laptop and desktop computer chips.

However, Gelsinger is convinced that Intel can successfully transform through technological improvements, so he began to build new factories to produce semiconductors for other chip manufacturers. Last week, Intel introduced Naga Chandrasekaran from Micron Technology as global chief operating officer to oversee the company's overall manufacturing operations.

After announcing layoffs starting in October 2022, Intel cut about 5% of its employees in 2023, reducing its workforce to 124,800 by the end of the year. Intel has also slowed spending in other areas. The company expects these cost cuts to save up to $10 billion by 2025.

Analysts expect Intel to report second-quarter revenue that was flat with the same period last year. According to Wall Street estimates, growth will pick up modestly in the second half of 2024, with total sales for the year increasing by 3% to $55.7 billion. This will be the first annual revenue growth since 2021.

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