News: Intel initiates new round of layoffs - These key departments bear the brunt

Talent Management

Intel initiates new round of layoffs - These key departments bear the brunt

The recent layoffs are part of Intel's ongoing restructuring initiated after CEO Pat Gelsinger announced plans in October 2022 to cut spending by up to $10 billion by 2025 due to decreased demand.
Intel initiates new round of layoffs - These key departments bear the brunt

This week, Intel began a fresh wave of layoffs impacting an undisclosed number of employees within its Sales and Marketing Group. A spokesperson for the chipmaker, headquartered in Santa Clara, California, verified on Thursday that the company has indeed implemented job reductions as part of a restructuring effort. 

However, no additional specifics were provided, reported CRN.  The Sales and Marketing Group, overseen by Christoph Schell, Intel's chief commercial officer, was affected by these changes. 

“With the objective of continuing to deliver on company strategy and drive outcomes for its customers, Intel’s Sales and Marketing Group announced changes to its organisational structure,” the Intel representative said in a statement. 

“We are confident in Intel’s future and are committed to supporting all employees through this process, including treating impacted employees with dignity and respect,” they added. 

In an additional statement, Jason Kimrey, vice president of Intel’s North America commercial and partner sales organisation, emphasised the significance of partners in Intel's transformation, stating that they remain a vital part of the company's future growth and investment plans. 

These recent layoffs mark the continuation of Intel's restructuring efforts, which began following CEO Pat Gelsinger's announcement in October 2022 of plans to reduce spending by up to $10 billion by 2025 in response to a significant downturn in demand. 

Despite the absence of specific figures on total layoffs, Intel has disclosed instances of layoffs affecting 50 or more employees within a 30-day period at its California offices, as required by the state’s Worker Adjustment and Retraining Notification (WARN) Act. 

Coinciding with these layoffs, Intel unveiled a new financial reporting structure that segregates its product design businesses from its chip manufacturing operations. This restructuring revealed a $7 billion operating loss for the product design segment in the previous year. 

Intel's strategic move aims to transform its chip manufacturing division, now rebranded as Intel Foundry, into an independent contract chip manufacturing entity, positioning itself to compete with leading Asian foundries like TSMC and Samsung

As part of its node acceleration plan spearheaded by Gelsinger, Intel Foundry's operating losses are anticipated to peak in 2024. However, the chip manufacturing business aims to achieve break-even operating margins by 2030, targeting 40 percent non-GAAP gross margins and 30 percent non-GAAP operating margins.

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Topics: Talent Management, #Layoffs, #HRTech, #HRCommunity

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