“We plan for the economic uncertainty to continue into 2023,” CEO Pat Gelsinger told investors in Intel’s latest earnings call.
Intel is considering cutting jobs in a broader attempt to cut costs as a continued slump in global PC sales continues to affect its business.
The chip giant posted a 20pc annual drop in third-quarter sales to $15.3bn and posted conservative profit and revenue for the rest of the year.
“Despite worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” CEO Pat Gelsinger said on an earnings call yesterday (October 27).
“To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 drive for the digital future.”
These “aggressive” moves include $3 billion in cost reductions in 2023, growing to $10 billion in annualized cost reductions and efficiency gains by the end of 2025.
Gelsinger also confirmed to several media outlets that these measures will include job cuts that will affect its global employees. Intel has around 120,000 employees worldwide, including around 5,000 in Ireland.
The latest earnings report and comments from Gelsinger confirm reports from earlier this month that Intel planned to cut thousands of jobs across its global operations amid continued PC sales – with uncertainty surrounding whether this would affect workers in Ireland.
“We plan for the economic uncertainty to continue into 2023,” Gelsinger said on the earnings call, according to The Wall Street Journal. “It’s just hard to see any spots of good news on the horizon.”
Other tech companies that have recently announced job cuts include Snap, Coinbase, Netflix, Twilio, Patreon, Intercom and Shopify, among others.
Meta CEO Mark Zuckerberg told employees in a Q&A last month that the company is cutting its budget across most teams — even those that are growing — amid revenue challenges and increasing competition. This is the company’s first major budget cut after 18 years of growth.
“I was hoping that the economy would have stabilized more clearly by now,” Zuckerberg reportedly said, suggesting that job cuts could be on the table. “But from what we’re seeing, it doesn’t look like it yet, so we want to plan a little conservatively.”
David Zinsner, chief financial officer at Intel, said the company is now focused on “adopting an internal foundry model” as part of its broader IDM 2.0 strategy for integrated device manufacturing announced last year.
In March, Intel unveiled the first phase of its vast investment program for semiconductor manufacturing across Europe, starting with an investment of 33 billion euros. Ireland will see €12bn of this pan-European investment at the company’s site in Leixlip, Co Kildare.
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