In a bold move to navigate the competitive landscape of the semiconductor industry, Intel announced on Thursday a significant reduction of its workforce by over 15%, equating to approximately 17,500 jobs. This decision marks a crucial step in Intel's ambitious turnaround plan aimed at revitalizing its money-losing manufacturing operations.
The job cuts come alongside Intel's decision to suspend its dividend in the fourth quarter, reflecting the company's strategic pivot towards more profitable ventures. CEO Pat Gelsinger emphasized the need for a leaner, more agile workforce, stating, \"I need less people at headquarters, more people in the field, supporting customers.\"
Intel's third-quarter revenue forecast fell below market expectations, highlighting the challenges the company faces with declining investments in traditional data center semiconductors and a lag in the burgeoning AI chip market compared to its rivals. This shift has already impacted investor confidence, with Intel's shares plunging 20% in after-hours trading, leading to a loss of over $24 billion in market value.
Despite these setbacks, the broader chip industry remains resilient. Competitors like Nvidia and AMD saw their shares rise, underscoring their strong positioning in the AI sector. Intel's focus on developing advanced AI processors and expanding its for-hire manufacturing capabilities is part of its strategy to regain the technological edge lost to leaders like Taiwan's TSMC, the world's largest contract chipmaker.
As Intel continues to implement its turnaround strategy, the majority of the job cuts are expected to be finalized by the end of 2024. The company remains committed to restructuring its operations to achieve long-term sustainability and competitiveness in the rapidly evolving tech landscape.
Reference(s):
cgtn.com
