Intel is laying off 15% of its workforce.

Intel’s Major Layoff Move

Intel has announced a decision to lay off more than 15% of its current workforce following the release of its latest financial report. This step is anticipated to affect more than 15,000 employees in total and is seen as part of a $10 billion cost-cutting plan aimed at restoring the company’s financial stability.

In its second quarter financial report, the company reported a net loss of $1.6 billion. In the same period of 2023, it had achieved a net income of $1.5 billion. Thus, within just a year, the company’s revenue experienced a decline of over $3 billion. Intel CEO Pat Gelsinger clearly expressed this situation in a note addressed to the employees.

In addition to the layoffs, the cost-cutting plan also includes creating separate financial reports for the Intel Products and Intel Foundry divisions. As of the second quarter, the Intel Foundry division recorded an operating loss of $2.8 billion. This figure reflects an even worse performance compared to the $1.8 billion operating loss recorded in the same period last year.

Moreover, Intel is forced to upgrade its factories to increase production capacity. The company is unable to fulfill some orders on time and thus has to contract production to third-party companies. Processor factories preferred by giants like Apple, Qualcomm, and AMD also produce Intel’s new Lunar Lake chips.

Errors in New Processors

Recently, Intel faced an additional blow in public perception due to instability issues with its 13th and 14th generation desktop CPUs. Although the company plans to implement a fix within this month to prevent further issues, the damage caused by microcode errors has the potential to create lasting effects. This situation continues to negatively impact the company’s sales and market position. To avoid further losses and reduce costs, Intel is compelled to lay off its employees.