Intel’s current business headwinds are surpassing its short-term growth projections as the firm recently lobbied for a $52 billion chip-stimulus bill this year.
In what has turned out to be a historically low downtime for most companies, the pangs of job cut might soon be felt by some staff of American multinational technology conglomerate Intel Corporation (NASDAQ: INTC). As reported by Bloomberg, citing sources close to the matter, the company’s planned layoff may run into thousands and is set to be announced as early as October 27 which culminates with the time in which the company will announce its third-quarter earnings.
The sources pointed out that the company’s proposed job cuts will impact some key departments including Sales and Marketing. The job cuts in these outfits can be as high as 20% of the total number working there.
Like most companies, Intel is facing significant headwinds in its business growth, particularly with the high rate of slow growth in its PC Processor unit, its most important business segment to date. The company’s challenges are encompassing and include the general strain in the supply chain which has affected demands from some of the firm’s top clients including but not limited to Dell Technologies, Lenovo, and HP Inc amongst others.
Intel’s PC Processor’s slow growth is also being affected by the influence of its fiercest competitors such as Advanced Micro Devices Inc (NASDAQ: AMD). Overall, Intel’s business is on track to take a significant hit in terms of sales which is likely to plunge by $11 billion lower than previously projected. Notably, the expected revenue in Q3 is expected to be around 20% below the anticipated figure.
These downtrends are culminating in the firm’s position to shed off some staff. The company boasts a workforce of 113,700 as of the end of July, making it one of the biggest employers of labor in the United States.
Making Sense of the Potential Intel Job Cut
The first priority of every firm today is to be able to survive the current economic hardship in which the costs of production are rising and inversely proportional to earnings.
Intel’s current business headwinds are surpassing its short-term growth projections as the firm recently lobbied for a $52 billion chip-stimulus bill this year. The firm also has plans to build the world’s biggest chip-making factory in Ohio in the near term, a move that does not really jive with the company’s likely staff retrenchment.
The company has, however, given earlier indications that it plans to cut costs in order to position the business on a more growth-conscious path in a bid to shore up profits.
“We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year,” Chief Executive Officer Pat Gelsinger revealed at the firm’s Q2 earnings call.
The closure of some divisions including its drone and mobile modem units and cuts in employee travel are also some of the measures it has adopted in recent times.
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