As shown by various reports in recent months, the PC market is slowing down in 2022 compared to previous years. Besides the PC vendors themselves, one of the companies most affected by this decline is Intel, which is now reportedly cutting thousands of jobs to reduce losses in its revenue.
Intel to lay off employees this month
As reported by Bloomberg on Tuesday, Intel is internally planning a “major reduction in headcount.” The report heard from sources familiar with the matter that the number of employees laid off could reach into the thousands. Although the news hasn’t been confirmed by Intel, Bloomberg says the layoffs will be announced any day now.
Intel currently has about 113,700 employees. The report also mentions that the divisions most affected by the cuts will be sales and marketing, which will be reduced by 20%. On October 27, the company will release its fiscal 2022 third quarter earnings report, so Intel wants to cut headcount before then.
The last time Intel made a significant employee cut was in 2016, when about 12,000 people were laid off.
Analysts expect Intel’s revenue to be down 15% in the third quarter, as will the company’s profit margins. Earlier this year, the chipmaker warned that 2022 sales would be about $11 billion lower than expected. A report from IDC revealed that the PC market dropped 15.3% year-on-year to 71.3 million units in Q2 2022.
Although the reduction in the PC market is the main reason why Intel is losing money, the chipmaker also lost market share to AMD, its main competitor. In 2020, the chipmaker lost Apple as one of its major clients, as the Cupertino-based company decided to put its own Apple Silicon chips inside Macs.
While Intel has been trying to regain market share with its chips, the company is also investing in areas such as artificial intelligence products and data centers. Intel is even reportedly working with TSMC to build chips using the same 5-nanometer process used for Apple’s M1 chips.
In 2019, the chipmaker sold its modem division to Apple for $1 billion. It’s unclear, however, whether all this will be enough to get the company back on track.
Other companies like Oracle and Arm have also been cutting jobs. Although these are difficult times for everyone in the computer industry, it seems that Intel will face even more challenges than its competitors.
