Intel is currently grappling with a dire situation as reports suggest that the company may have to let go of 10,000 employees globally due to the repercussions of instability issues surrounding the 13th and 14th generation Core i processors. The challenges faced by these chips have significantly tarnished Intel’s reputation and market standing, leading to this drastic measure.
Anticipating the looming crisis, Intel is opting to proactively downsize its workforce to mitigate the impact. The persistent problems with the Core i systems have not only eroded the brand’s image but have also resulted in customer loss and a shift towards competitors like AMD. This shift can translate into revenue loss for Intel, especially with potential customers diverting to AMD for the upcoming Lunar Lake processors. Moreover, the need to replace faulty processors incurs additional costs for the company.
To offset the declining sales and manage the expenses related to product replacements and service, Intel is considering laying off 10,000 employees globally, which would downsize the current workforce from 110,000 to 100,000. The company aims to achieve cost savings of $10 billion by the year 2025 through this restructuring.
In a strategic move to redirect its focus towards high-potential sectors like AI, consumer and professional CPUs, and chip manufacturing, Intel has been undergoing significant organizational changes. Recently, Intel recruited Naga Chandrasekaran from Micron to spearhead the development of Intel Foundry Service, aimed at attracting a broader customer base without resorting to questionable tactics. As part of this restructuring, Intel is divesting from non-core sectors, with recent divestments including NUCs and server production.
Despite the plans for these extensive workforce reductions, an official announcement regarding the layoff plan has not been made public, with information leaking through sources such as Bloomberg. The company is navigating a challenging period as it strives to realign its operations and offerings to secure its market position and financial stability.
