Intel Reportedly Planning Thousands of Layoffs, CEO Says Company ‘Must Do Better’

Intel reportedly is planning massive job cuts that could impact thousands of employees in response to the PC market slowdown.

The layoffs will be announced as early as this month, likely around the same time as its third-quarter earnings announcement on Oct. 27. That’s according to Bloomberg, citing people with knowledge of the situation, Some divisions, including Intel’s sales and marketing group, could see layoffs impacting about 20% of staff.

The company had 113,700 employees as of July. Intel isn’t commenting on the layoffs.

Bloomberg also said Intel is seeing a steep decline in demand for PC processors. In addition, it hasn’t won back business from rivals.

Workers have started buzzing about the upcoming layoffs on TheLayoff.com.

“There are two good indicators for it,” said one worker. “Are you over 50? Is your pay above average? It doesn’t matter if you are on one of the main projects or if you think you’re indispensable for your institutional knowledge and experience. If you check those two categories, your chances of being laid off are above average.”

Dropping Revenue

Intel’s revenue was down 22% during the second quarter compared to the year-ago quarter. Pat Gelsinger, Intel’s CEO, said the results were “below the standards we have set for the company and our shareholders.”

Intel’s Pat Gelsinger

“We must and will do better,” he said. “The sudden and rapid decline in economic activity was the largest driver. But the shortfall also reflects our own execution issues. We are being responsive to changing business conditions, working closely with our customers while remaining laser-focused on our strategy and long-term opportunities. We are embracing this challenging environment to accelerate our transformation.”

Rik Turner is principal analyst at Omdia, which shares a parent company with Channel Futures (Informa).

Omdia’s Rik Turner

“It’s quite clear that Intel is no longer the all-conquering, 800-pound gorilla of the silicon market that it once was,” he said. “That’s not to say that it’s a spent force. But one does get the impression that it’s now in the walking wounded category.”

Intel Competitors

In terms of Intel competitors, AMD seems to have been in one of its periodic upticks over the last year or so, Turner said.

“Though I notice that it has just spooked the market with an announcement that PC demand isn’t what it used to be,” he said. “Nvidia appears to have gone from strength to strength.”

Turner said when he listened to a briefing from Intel on their current situation and future plans, “they came across as a company fighting a rear-guard action rather than one that was breaking significant new ground.”

“It’s definitely the case that we live in uncertain times,” he said. “And numerous developed-world economies are somewhat shaky. But I can’t help feeling that Intel’s is a particularly bad situation, a bit like someone with underlying health problems when COVID-19 came along.”

Intel’s stock price was up a little more than 1% at 1:23 p.m. ET on Wednesday.