Intel is having a difficult time and intends to fire 21,000 workers as a result of its subpar performance
Layoffs will most likely be a part of Intel's ongoing restructuring. Bloomberg reports that the company intends to fire roughly 20% of its employees this week. It is anticipated that about 21,000 Intel workers will be let go.
According to Intel, the layoffs are a component of the company's new management's strategy, spearheaded by Lip Pu Tan, to enhance management and leadership and restore the company's culture. Although it will take time to determine whether more layoffs are the best course of action, Lip Pu Tan wants to regain the company's leadership, which former CEO Pat Gelsinger already felt had been lost. Intel laid off 15,000 workers in the past year alone.
Since Intel has been losing market share to rivals for years, Tan hopes to improve the company. Additionally, the business has lost its technological advantage and is finding it difficult to compete with Nvidia and other companies in the computing and artificial intelligence component markets, which it entered late. Over the last three years, this has resulted in a drop in sales, and Intel has been reporting losses.
Tan only took office about a month ago, but he has already taken a number of actions to make things right. These adjustments include plans and agreements to eliminate divisions that are not necessary to accomplish its objectives, as well as the replacement of a number of executives. Intel agreed a few days ago to sell Silver Lake Management, an investment fund, 51 percent of Altera's shares.
Additionally, they have delayed a number of their expansion plans, such as building a factory in Ohio, USA, and another in Magdeburg, Germany, which, when completed, would have been the largest chip production facility in the world. Rumors circulated a few days ago that they were in negotiations to begin a partnership with TSMC, but it appears that these discussions have not produced any positive outcomes.
The CEO of the company said at the Intel Vision 2025 event that the company also needs to improve its balance sheet, replace lost engineering talent, and optimize and modify manufacturing processes to satisfy customer demands.
At Intel's quarterly earnings call next Thursday, Tan is probably going to give more information about his future plans for the business. Of course, nobody is anticipating any unexpected outcomes in contrast to past findings. Although no one anticipates a quick recovery in sales, the worst of the revenue and sales decline seems to be over. Actually, it might take a few years if they do.