Intel announces major restructuring: 15,000 jobs to be cut
Intel Corporation has unveiled plans for a significant workforce reduction, aiming to lay off approximately 15,000 employees—15% of its global workforce—as part of a broader initiative to achieve $10 billion in cost savings by 2025. The announcement came following the release of the company's second-quarter 2024 earnings on August 1, 2024.
CEO Pat Gelsinger addressed the changes in an all-company meeting and memo to employees, citing financial challenges and a competitive market landscape as reasons for the restructuring.
"Our revenues have not grown as expected, and our costs are too high. We need bolder actions to address both," he stated during the meeting.
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The restructuring includes several key priorities aimed at enhancing efficiency across the company. Intel plans to streamline operations, reduce expenses, conduct portfolio reviews to eliminate underperforming products, and consolidate overlapping functions. The company will also automate processes to expedite workflows.
As part of the cost-cutting measures, Intel will reduce its 2024 capital expenditures by over 20% and cut non-variable costs by approximately $1 billion in 2025. The tech company will also suspend its stock dividend starting next quarter to prioritize business investments.
In his memo to employees, Gelsinger acknowledged the difficulty of the decision. "This is painful news for me to share. I know it will be even more difficult for you to read. This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company's history."
To mitigate the impact on employees, Gelsinger announced plans for a companywide enhanced retirement offering for eligible employees and an application program for voluntary departures. He emphasized the importance of adhering to Intel's values throughout the process.
These changes are part of Intel's efforts to adapt to market conditions and continue its IDM 2.0 strategy, which focuses on re-establishing process technology leadership, expanding manufacturing capacity, and delivering AI innovations.
Gelsinger concluded his message by emphasizing the company's ongoing importance: "The world will increasingly run on silicon, and the world needs a healthy and vibrant Intel," underscoring the significance of the company's transformation efforts.
