In one shock for the job market, Chipmaker Intel has announced that it will cut 15% of its workforce about 15,000 jobs in order to turn its business around and compete with more successful rivals like Nvidia and AMD.
The chipmaker has announced a decline of its workforce as it is embarked on a journey to recovery and its new $10 billion cost-saving plan for 2025.
The company currently employs more than 125,000 workers, layoffs could affect as many as 19,000 people.
In a memo to staff, Intel Corp. CEO Pat Gelsinger said, ‘Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate’.
‘Our revenues have not grown as expected and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low’, he added. The job cuts follow a disappointing quarter and forecast for the iconic chipmaker, founded in 1968 at the start of the PC revolution.
Next week, Gelsinger wrote, Intel will announce an enhanced retirement offering for eligible employees and offer an application program for voluntary departures.
He said, ‘These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career’. The bulk of the layoffs are expected to be completed this year. The Santa Clara, California-based company is also suspending its stock dividend as part of a broader cost-cutting strategy.
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