Intel to Lay Off Thousands as It Aims to Recover Market Share and Revitalize Production

Intel is reportedly planning to cut thousands of jobs as part of a strategic effort to finance recovery.  

As a dominant force in the personal computing and server sectors, Intel has struggled to meet the surging demand for chips used in artificial intelligence applications. While Intel did not respond to requests for comment when contacted by Reuters, the chipmaker pushed its shares up by about 1% in extended trading. Despite the brief market rally, Intel’s stock has plunged by 40% this year.  

CEO Pat Gelsinger has been driving an aggressive turnaround plan aimed at regaining the company’s competitive standing. His strategy includes revitalizing Intel's manufacturing capabilities, advancing chip technologies, and expanding into new markets.

Previously in October 2022, Intel announced a cost-cutting initiative aimed at reducing annual expenses by US$3 billion in 2023, part of which involved workforce reductions. According to regulatory filings, Intel's headcount was expected to drop to 124,800 by the end of 2023 from 131,900 the year before.

By 2025, the company projected these measures would result in annual savings between $8 billion and US$10 billion.  

Despite these efforts, Intel's outlook remains mixed. Analysts anticipate second-quarter revenue to be stagnant compared to the previous year, with a 23% decline expected in the company’s data center and AI divisions, according to LSEG data. To diversify, Intel is making a significant push into the foundry business, manufacturing chips for other companies, in addition to its own designs.  

Investors are closely watching Intel's prospects amid the political push to boost chip manufacturing in North America, aimed at diversifying supply chains and reducing reliance on Taiwan. This political push could offer a much-needed boost to Intel's recovery efforts.