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‘We are planning for the economic uncertainty to persist into 2023,’ CEO Pat Gelsinger told investors on Intel’s latest earnings call.
Intel is considering cutting jobs in a broader attempt to reduce costs as an ongoing slump in global PC sales continues to affect its business.
The chip giant posted a 20pc year-on-year drop in third quarter sales to $15.3bn and issued conservative profit and revenue forecasts for the rest of the year.
“Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” CEO Pat Gelsinger said at an earnings call yesterday (27 October).
“To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future.”
These “aggressive” moves include $3bn in cost reductions in 2023, growing to up to $10bn in annualised cost reductions and efficiency gains by the end of 2025.
Gelsinger also confirmed to multiple media outlets that these measures will include job cuts that will affect its global employees. Intel has roughly 120,000 employees worldwide, including around 5,000 in Ireland.
The latest earnings report and comments from Gelsinger confirm reports from earlier this month that Intel was planning to cut thousands of jobs across its global operations amid the ongoing PC sales drop – with uncertainty around whether this will impact workers in Ireland.
“We are planning for the economic uncertainty to persist into 2023,” Gelsinger said on the earnings call, according to The Wall Street Journal. “It’s just hard to see any points of good news on the horizon.”
Other tech companies that have announced job cuts recently include Snap, Coinbase, Netflix, Twilio, Patreon, Intercom and Shopify, among others.
Meta CEO Mark Zuckerberg told employees in a Q&A last month that the company is cutting its budget across most teams – even ones that are growing – amid revenue challenges and increasing competition. This marked the company’s first major budget cut after 18 years of growth.
“I had hoped the economy would have more clearly stabilised by now,” Zuckerberg reportedly said, hinting that job cuts might be on the table. “But from what we’re seeing it doesn’t yet seem like it has, so we want to plan somewhat conservatively.”
David Zinsner, chief financial officer at Intel, said that the company is now focusing on “embracing an internal foundry model” as part of its broader IDM 2.0 strategy for integrated device manufacturing announced last year.
In March, Intel revealed the first stage of its expansive investment programme for semiconductor manufacturing across Europe, starting with a €33bn investment. Ireland will see €12bn of this pan-European investment at the company’s site in Leixlip, Co Kildare.
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