Intel Plans to Cut 15,000 Jobs to Lower Costs

Intel plans to reduce its workforce by more than 15%. The majority of cuts are expected by the end of the year as a part of a multi-billion dollar cost-saving plan.

As part of its financial results statement for Q2, where it booked a $1.6 billion loss, Intel revealed plans for sweeping cuts involving reducing both operating and capital spending. It also intends to suspend its shareholder dividend from Q4. CEO Pat Gelsinger said the aim was to improve profitability and capital efficiency by more than $10 billion in 2025.

Discussing the reduction in spending and headcount, he explained the 15,000 workforce cut is expected to be completed by end-2025. “We do not do this lightly, and we have carefully considered the impact this will have on the Intel family,” he added. “These are hard but necessary decisions”.

Intel forecasts lower staff numbers and other measures will reduce operating expenses to $20 billion for 2024, with this expected to fall to $17.5 billion in 2025 and reduce again in 2026. The new 2025 figure, Gelsinger said, was more than 20% below previous estimates. In 2023 operating expenses were $21.6 billion.

Intel also plans to cut capital spending by around 20% this year from its initial forecast, reflecting softer second-half demand. The moves are designed to achieve a clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed to support the company’s long-term strategy.

In Q2, Intel's revenue was broadly flat year-on-year at $12.8 billion, though its net loss of $1.6 billion compared to a profit of $1.5 billion in 2Q23. The company noted results from the quarter had been impacted by factors including ramping of its AI PC product, higher than typical charges related to non-core businesses, and the impact of unused capacity.

Gelsinger noted its financial performance in the quarter was disappointing, even as it hit key product and process technology milestones. “Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation,” he added.