Intel Tightens Belt, Plans to Lay Off Thousands of Employees

U.S. semiconductor company Intel is set to lay off thousands of employees to cut costs, Bloomberg reported on the 30th (local time), citing sources.

According to the report, Intel is currently discussing a workforce reduction plan targeting thousands of employees and is expected to announce it within this week. Intel has approximately 110,000 employees excluding spun-off divisions.

This layoff is seen as a belt-tightening measure to reduce expenses such as labor costs. Once dominant in the U.S. semiconductor industry, Intel's position has narrowed due to sluggish profits and expanding market shares of competitors including AMD. Amid this, CEO Pat Gelsinger is investing heavily in research and development (R&D) to regain market share.

Previously, as part of cost-cutting efforts, Intel reduced its workforce by 5% from October 2022 through 2023. Besides layoffs, Intel estimates that by cutting other expenses, it could save up to $10 billion by 2025. Intel’s stock, which closed down over 2% in regular trading on the New York Stock Exchange, showed a roughly 1% rise in after-hours trading following the layoff news.

Intel is also scheduled to announce its second-quarter earnings on the 1st of next month. Second-quarter revenue is expected to show little change compared to the previous year. Wall Street anticipates that with growth recovery in the second half of the year, Intel will record annual revenue growth of 3% for the first time since 2021.

Meanwhile, on the same day, multinational automaker Stellantis, which owns brands such as Jeep and Chrysler, announced it will offer voluntary retirement to non-union U.S. employees at the vice president level and below. Stellantis explained in a statement that this is to assist employees who wish to pursue other careers or are interested in retirement. The company added that if the number of volunteers is insufficient, involuntary layoffs may follow.