It seems that Intel is also following suit with other big tech companies to decrease its spending. There are now confirmed reports that Intel is planning to cut thousands of jobs at the company. This step is in line with Intel's plan to cut down its spending by billions of dollars.
After releasing the earnings for the 3rd quarter, Intel announced that it would cut its costs by $3 billion during the next year. Pat Gelsinger (CEO of Intel) told the media that some of that will come from layoffs (people costs). Furthermore, Intel is also planning to reduce the work hours for a few employees as well. Within the next 2-3 years, Intel plans to reduce its costs by $8 - $10 billion every year.
The company is facing a lot of problems, but one of the major ones is a surplus of semiconductor chips. During the pandemic, a major shortage of semiconductor chips plagued a lot of industries. However, attempts to rectify this problem lead to the overproduction of semiconductor chips.
That's why experts are forecasting that by 2023, the chip industry will move towards a surplus problem. This will lead to decreased revenue among the chip companies such as Intel, Nvidia, and others.
According to insiders, the departments which will face the biggest cuts are the marketing and sales teams of Intel. However, that's not to say that other departments will be safe in the coming years, as that's still unclear.
If we talk about numbers, Intel has managed to get out of the red after losing around $0.5 billion in Q2. For the current quarter, Intel has managed to make around a billion dollars in profit. But when we compare the results of the current quarter with the Q3 2021, it seems that the numbers are down by 85%.
If we look around, even other tech companies such as Apple, Google, and even Twitter are planning to cut costs by laying off a part of the workforce.