Intel has verified the circulating rumors of workforce downsizing within its client computing and data center sectors, citing the tough macroeconomic climate within the CPU market.
The tech giant intends to execute cost-saving strategies and streamline efficiencies by introducing both company-wide and role-specific headcount reductions, although specific numbers and affected divisions remain undisclosed. This decision follows Intel's $2.8 billion net loss last quarter, primarily attributed to a weakened demand for consumer electronics that impacted both client computing and data center sectors.
"Intel is working to accelerate its strategy while navigating a challenging macro-economic environment. We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some business and function-specific workforce reductions in areas across the company.
"We continue to invest in areas core to our business, including our U.S.-based manufacturing operations, to ensure we are well-positioned for long-term growth. These are difficult decisions, and we are committed to treating impacted employees with dignity and respect." Intel Spokesperson to Tom's Hardware.
Despite the challenges, Intel reaffirms its dedication to investing in the company's core areas, such as US-based manufacturing endeavors, aligning with the IDM 2.0 strategy of funding new chip factory development. However, Intel has yet to reveal the extent of the budget cuts.
This workforce reduction comes on the heels of underwhelming financial performance from other chip manufacturers like TSMC and Samsung, who also disclosed declining revenues and profits in their chip sectors. Intel, like many major companies, outsources certain functions, including chip production, to external firms; spending reductions may entail decreased reliance on these contracted services.
Intel has submitted a WARN notice for its Folsom campus, announcing the layoff of 60 employees by May's end in 2023 and forecasting further separations within the subsequent 30 days. The Folsom site's total layoffs have now reached 516 over the past five months.