Intel is preparing for a substantial round of job cuts aimed at significantly reducing costs and freeing up critical budgets to support its recovery and revitalization plans, according to a Bloomberg report based on anonymous sources familiar with the situation.
The company is expected to unveil these plans as early as this week, marking a significant move in its efforts to stabilize and refocus its operations. This latest round of layoffs comes in response to ongoing financial challenges, including declining revenues and a shrinking market share, as Intel struggles to compete with Nvidia’s highly successful artificial intelligence (AI) chips.
Under the leadership of CEO Pat Gelsinger, Intel is pursuing an ambitious strategy to restore its competitive edge through massive investments in research and development and expanding its foundry operations. The company’s foundry activities involve manufacturing chips designed by other companies, a shift that could potentially transform Nvidia from a competitor into a customer, thereby providing a significant boost to Intel’s business.
To fund these large-scale initiatives, which include building new, advanced production plants, Intel is implementing these job cuts to reallocate resources and ensure adequate capital for its strategic investments.
The company currently employs 110,000 individuals, not including those in spin-off units, and has already made significant workforce reductions. Between October 2022 and the end of 2023, Intel cut 5% of its workforce, which previously numbered 124,800 employees. This move is part of a broader cost-saving plan aimed at saving $10 billion by 2025.
Intel’s workforce reduction also impacts its significant presence in Israel, where it is the largest private high-tech employer with over 11,000 local employees.
* Calcalist contributed to this article.
