It is still a deliberate speculation that was launched by the online service Bloomberg News on October 11, 2022 and was immediately picked up by all high-tech media worldwide as sensational news: Intel was allegedly planning large-scale staff cuts.
According to Bloomberg, Intel wants to improve its profitability with this measure. There is talk of several thousand redundancies, up to 20% of the current workforce of more than 113,000 employees, preferably in sales and marketing.
So far, Intel has neither confirmed nor denied this announcement, and there is no mention of it on the various Intel websites in the USA and Germany. This is not expected until October 27, when Intel presents its third quarter results. However, all signs point to bad news, as already reported in July for the second quarter of the 2022 financial year: the prospect of annual revenue being $11 billion lower than previously projected. "We are reducing our core expenses in calendar year 2022, and we will take further actions in the second half of the year," Intel CEO Pat Gelsinger said at the time.
For Intel's third financial quarter, industry analysts expect a further decline in sales of 15%. Profit margins have also fallen sharply, according to the analysts. The overall result for 2022 is therefore likely to be around USD 68 billion (previously USD 76 billion). The current share price is correspondingly weak. All of this, it is said, is due to the declining demand for PC processors. Inflation, export restrictions to China and the saturation of demand following the coronavirus-related home office upswing last year are also reflected in the sales figures of other processor providers such as AMD, Nvidia, ARM and Oracle. There are also signs of a downturn at users Dell and Lenovo.
Looking back historically, according to Bloomberg, the last major wave of layoffs at Intel was in 2016, when 12,000 jobs, 11% of the workforce, were cut. Since then, only internal trimming measures such as the discontinuation of the production of chips for cell phones and drones have taken place. However, a hiring freeze has been in place since the beginning of the year. This contrasts with Gelsinger's recent announcement about the successful conversion of production to the 'internal foundry model' under the seal of his IDM2.0 strategy, the 'second phase' of which has just begun. Huge investments in new wafer fabs in the USA and Europe are also on the agenda. We will know more on October 27.
