Spectre of layoffs looms over Intel following dismal sales
Shareholders gotta get their dividends somehow, right?
More layoffs may be imminent at Intel following the x86 giant's $2.8 billion Q1 loss.
Posting last week on Blind, a popular spot for techies discussing impending layoffs, one employee wrote that the corporation's Client Computing Group (CCG) was seeking volunteers, and that an involuntary round of layoffs would follow if there weren't enough volunteers. We take this to mean that Intel is offering buyouts for early retirement in some of its divisions. The employee also reported involuntary layoffs hitting the Datacenter and AI group (DCAI), with notifications to land in June.
Another staffer emphasized that these wouldn't be company-wide layoffs, but that a "huge portion" of the corporation is doing layoffs. Others referenced an all-hands meeting last week in which cuts appear to have been mentioned.
Over the weekend, SemiAnalysis's Dylan Patel, citing contacts within the chip shop, predicted massive layoffs were on the way. Patel's prognostications suggest Chipzilla's DCAI and CCG teams are each set for budget cuts of around ten percent. The analyst estimated that one in five employees working in those divisions could be cut. He also noted that logic technology positions would be unaffected by layoffs:
Very unfortunate news, but massive layoffs at Intel coming!Intel's Datacenter and Client computing groups are receiving ~10% budget cutsIt's up to divisions to figure out how to cutGiven fixed costs, means as much as 20% layoffs in groupsLTD (process node) unaffected$INTC
— Dylan Patel (@dylan522p) May 7, 2023
Patel's tweet seemingly corroborates some of the reports on Blind that Intel is making layoffs and cuts on a division-by-division basis.
However, people familiar with the matter have assured The Register that suggestions of a 20 percent workforce reduction in Intel's DCAI and CCG divisions was pure speculation.
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In a statement to The Register, Intel made it clear that layoffs are very much on the table as it looks to navigate challenging economic conditions that have seen it report losses of nearly $3.3 billion across the past two quarters, while revenues plunged by over 30 percent, year on year. On the bright side – for shareholders anyway – the listed entity still managed to hand out $1.5 billion in dividends.
"Intel is working to accelerate its strategy while navigating a challenging macro-economic environment. We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some business and function-specific workforce reductions in areas across the company," Intel's statement reads.
"We continue to invest in areas core to our business, including our US-based manufacturing operations, to ensure we are well-positioned for long-term growth. These are difficult decisions, and we are committed to treating impacted employees with dignity and respect."
The Register asked Intel about the ten percent budget cuts to its datacenter and client computing divisions, but Chipzilla's spokespeople declined to address that inquiry.
Intel has warned of layoffs since October 2022, after the silicon-slinger committed to cutting annual spending by $10 billion. At the time, Intel execs said those cuts would include laying off a "meaningful number" of employees and dumping products.
In the wake of that decision Intel has cut several projects including a $700 million liquid and immersion cooling lab in Oregon, a $200 million R&D facility in Israel, reorganized its graphics division, canceled its Rialto Bridge datacenter GPUs, delayed its Falcon Shores APU, sold off its server design business unit, and canned its ill-timed cryptomining ASICs.
Layoffs on a similar scale to the above product changes have not been announced.
Intel employs more than 110,000 people around the globe. While the mega-corporation has announced some layoffs – Californian law requires filing a "WARN notice" after job cuts – those Intel posted mentioned just short of 900 positions lost at its California offices so far this year. As for layoffs outside of California, Intel declined to comment on how many it had let go since October 2022. ®