Intel has long expected a decline in PC sales after increased demand for its products caused by the COVID-19 pandemic. In July, the company told Nikkei that it wanted to raise the prices of its processors and other chips due to “inflationary pressures” later this year.
This may not be the only step Intel is taking to counter the declining PC market. Bloomberg reports that Intel plans to cut thousands of jobs and may do so around the same time its third-quarter earnings report is released on Oct. 27.
Intel lowered its sales and profit forecasts for 2022 back in July when it said it expected revenue for the year to be $11 billion less than previously projected. CEO Pat Gelsinger said during a second-quarter earnings call that the company “will look to take additional actions in the second half of the year” to boost profits.
Bloomberg Intelligence analyst Mandeep Singh said the layoffs could cut Intel’s cost of maintaining operations by about 10 to 15 percent. Singh also said those costs could cost at least $25 billion to $30 billion.
Mobileye, the self-driving tech firm that Intel acquired for $15.3 billion in 2017, recently filed for an IPO. Intel intends to keep most of its IPO proceeds and help fund the chip factories it plans to build. However, the projected IPO proceeds may not be enough to prevent mass layoffs affecting various company divisions. Some groups, such as sales and marketing, will reportedly be cut by 20 percent.
Last year, Intel planned to expand its foundry business. It committed $20 billion to build a large chip factory in Ohio, which it intends to turn into the most prominent “silicon manufacturing location on the planet.”
The company also acquired Tower Semiconductor, a chipmaker serving customers across industries, for $5.4 billion. There seems to be no indication that these expansion plans are changing, with Bloomberg reporting that Intel intends to pursue the goals it has set for itself as a leaner company.
