Intel plans to cut 15,000 jobs, or about 15 percent of its workforce, CEO Pat Gelsinger said in a note to employees Thursday.
The mass layoffs come amid an effort to deliver $10 billion in cost savings in 2025, after the chipmaker posted “disappointing” second quarter results.
“This is painful news for me to share,” Gelsinger said. “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.”
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” he continued. “Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI.”
Intel brought in $12.8 billion in revenue in the second quarter of 2024, down 1 percent from the previous year and below expectations for the company. It also posted a net loss of $1.6 billion, or 38 cents per share.
“Our costs are too high, our margins are too low,” Gelsinger added in his note to employees. “We need bolder actions to address both — particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”
In addition to layoffs, the company also plans to simplify its portfolio to focus on “fewer, more impactful products,” reduce capital expenditures and suspend its stock dividend to “prioritize investments in the business and drive more sustained profitability,” the CEO said.