According to a new report, Intel plans to cut employee numbers by thousands in order to cut costs in the face of a slowing PC market.
Around 20% of the company's staff could be affected by the cuts, according to a report citing people with knowledge of the matter.
The "major reduction in headcount" is expected to be announced as early as this month around the time of Intel's third-quarter earnings report. In 2016 there was a wave of layoffs at Intel. Intel has over 113,000 staff based on the last count.
There has been a significant drop in PC sales due to global inflation and the steep decline in demand for PC processors has negatively affected Intel's revenue.
According to Canalys, worldwide PC shipments went into free fall in the third quarter. The results were similar, with sales falling over 15% and PC shipments falling over 20%.
Intel's shares have been hit harder than other chipmakers as it struggles to regain market share lost to rivals. Intel said earlier this year that sales would be $11 billion lower than it had expected, and analysts are now saying that third-quarter revenue will fall by 15%. Intel's margins are falling as well.
Intel promised to cut expenses and make other changes during its earnings call. The short-term outlook isn't good. The impact of Apple's decision in 2020 to move away from using Intel in its Mac computers is still being felt by the chipmaker. It has lost its position in the manufacturing of chips.
To counter market conditions and boost innovation, Intel is looking to sell more advanced artificial intelligence-powered chips to the data center market and is working with TSMC to build chips using the Taiwanese foundry's 5nanometer process. The value of Intel's Mobileye self-driving technology business has been pegged at $30 billion.
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