Intel to Cut Additional 21,000 Jobs... Cancels Foundry Plant Construction

Large-Scale Restructuring Plan Announced Amid Management Crisis
"Too Many Investments Without Considering Demand"

Intel, the U.S. semiconductor company currently facing management difficulties, announced a large-scale restructuring plan on July 24 (local time).

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Intel stated that, as of the end of last month, its workforce stood at approximately 96,000 employees, and it plans to reduce this number significantly to 75,000 by the end of the year. The company aims to cut 15% of its workforce, reducing headcount by 21,000 through both natural attrition and additional layoffs resulting from business unit splits.

At the end of last year, Intel had 108,900 employees, meaning that within one year, its workforce will decrease by roughly one-third. Intel had previously announced in August last year that it would cut 15,000 jobs from its 124,800 employees as of the end of 2023.

Alongside this large-scale reduction, Intel also revealed plans to cut costs by $17 billion this year and to fully review its foundry plant construction plans. As a result, the company will cancel new foundry plants that were planned in Germany and Poland, and will integrate testing and assembly operations in Vietnam and Malaysia. Intel also stated that the pace of construction at its advanced facility in Ohio, USA, will be adjusted depending on market demand and the acquisition of major customers.

Lip-Bu Tan, who took office as Intel CEO in March, commented in a memo to employees, "The first few months as CEO have not been easy," and pointed out, "Over the past few years, Intel made too many investments too quickly without sufficiently considering demand. As a result, our factory infrastructure became unnecessarily dispersed and underutilized."

Tan also said that the company is working to regain the data center chip market share lost to its competitor AMD, and that he will personally review and approve all of Intel's semiconductor designs before they proceed to the final production stage.

On the same day, Intel announced that its second-quarter sales reached $12.6 billion, a 1.8% decrease compared to the same period last year. This figure exceeded Wall Street expectations, which were estimated at $11.92 billion by market research firm LSGE.

By segment, the Client Computing Group, which includes CPUs for PCs, recorded sales of $7.9 billion, down 3%. The Data Center Group, which includes server CPUs and some artificial intelligence (AI) chips, saw sales rise by 4% to $3.9 billion. The Foundry segment, which mainly involves internal transactions and contract semiconductor manufacturing, posted $4.4 billion in sales but recorded an operating loss of $3.17 billion.

On the New York Stock Exchange that day, Intel's share price closed at $22.63, down 3.66% from the previous session.

This content was produced with the assistance of AI translation services.