Intel Considers Thousands of Layoffs Amid Declining PC Demand

by Jeong Hyunjin

Published 12 Oct.2022 09:50(KST)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] On the 11th (local time), Bloomberg News, citing sources, reported that U.S. semiconductor company Intel is considering layoffs involving thousands of employees to cut costs amid concerns over deteriorating performance due to declining PC demand.

Bloomberg stated that the layoffs could be announced as early as this month. Intel is scheduled to release its third-quarter earnings on the 27th, so the layoffs are expected to be announced around the same time. As of the end of July, Intel had 113,700 employees, and sources predict a 20% reduction in staff within Intel's sales and marketing departments.

Intel's move is analyzed as a cost-cutting measure in response to the significant slowdown in PC demand amid recent recession concerns. According to market research firm Gartner, global PC shipments in the third quarter of this year were 68 million units, a 19.5% decrease compared to a year earlier. This is the largest decline in the past 20 years.

Earlier, Intel announced second-quarter earnings in July that fell far short of expectations and revised its forecast downward, projecting this year's revenue to be $8 billion to $11 billion (approximately 15.8 trillion KRW) less than initially expected. At that time, CEO Pat Gelsinger said, "We are lowering core costs in 2022 and will take additional measures in the second half."

Mandeep Singh, an analyst at Bloomberg Intelligence, estimated that if these layoffs are implemented, Intel's fixed costs would decrease by 10-15%, resulting in cost reductions of at least $25 billion to $30 billion.

Intel's last large-scale layoffs were carried out in 2016, when about 12,000 employees, or 11% of the total workforce, left the company. Since then, Intel has conducted smaller layoffs and eliminated some units, such as the drone division.