Intel mass layoffs: 18,000 employees to be sacked as part of plan to cut expenses by $20 billion

Intel, one of the world's leading chipmakers, said it plans to phase out around 15% or 18,000 members of its workforce as part of a move to streamline operations.

The statement was issued by the company's top executives following the release of the results of the recently concluded second quarter. The tech giant logged a loss of approximately $1.6 billion during the quarter.

Intel's chief financial officer David Zinsner said the Q2 earnings were adversely impacted by "headwinds" related to the ramp-up of the company's AI-based PC product, and due to unutilised capacities at its facilities.

Intel plans to improve its profits and strengthen the company's balance sheet by "implementing spending cuts", he reportedly said.

Since the company plans to phase out 15% of the employees, it would result in the layoff of around 18,000 staff members as the total headcount stood at 124,800 at the end of 2023.

Eye on rivals

Intel, once seen as the dominant player in the chip industry, is now facing increasing competition from younger rivals including Nvidia, AMD and Qualcomm.

The move to streamline the operations could have stemmed out from the surge in competition, analysts said. Nvidia, in particular, has surged ahead when it comes to the advanced artificial intelligence chips, they pointed out.

While Intel is reeling under quarterly loss, Nvidia, in the three-month period ending April 28, 2024, reported its highest ever quarterly revenue of $26 billion, up 18% sequentially and up 262% from a year ago.

In the trading session on Thursday, Intel dropped 5.5% to settle at $29.05 per share on the NASDAQ.