American tech giant Intel seems to be going through a hard time financially at the moment as the company is now looking to make some hard decisions on its path to recovery. This was confirmed by the chipmaker, who announced that over 15,000 of its employees would be made redundant as it looks to save on costs worth over $10 billion by 2025.
As reported by The Verge, Intel is set to massively reduce the size of its R&D (research & development) and marketing departments and expenditure by billions each year through 2026. This year alone is set to see a capital spending cut by more than 20%.
The company also plans to restructure to “stop non-essential work” and review “all active projects and equipment” to reduce the overall spending.
The staff was reportedly informed of this decision through an official memo from Intel CEO Pat Gelasinger stating his remorse for this news knowing so many people will be left out of employment.
This comes at a time when Intel has been reporting huge losses for Q2 2024 of up to $1.6 billion, about $437 million more than what it lost in Q1 2024.
“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” stated Gelsinger in the company’s statement.
One admission from the company’s CEO was the fact that Intel seems to have been left behind when it comes to market trends like AI. This is when you consider rivals like Nvidia which is now one of the biggest companies in the world financially thanks to how it took advantage of the market trend through the manufacture of AI server chips.
Qualcomm and Apple also seem to have caught up to Intel with Arm processors that now offer more battery life and higher performance levels. Microsoft has also been slowly ditching Intel and is now making its own chips for its Surface laptops.
Generally, it is clear for everyone to see why Intel is currently suffering alot financially as it looks to be getting bypassed by the industry as a whole. Will they be able to recover and catch up? Only time will tell.
