According to a report late Tuesday, Intel Corp. will lay off thousands of workers by the end of the month, around the same time the chipmaker is reporting quarterly results amid a difficult year for semiconductor makers.
Layoffs will be announced “as soon as this month,” Bloomberg reported, citing unidentified sources who are said to know the cuts are coming. Intel INTC, -0.63% employs approximately 121,100 people worldwide. Although the report didn’t provide geographic information about the targeted jobs, it said sales and marketing departments could see up to 20% headcount reductions.
The last time Intel laid off a large number of employees was in April 2016, when the Santa Clara, California-based chip company announced it would cut 12,000 jobs, or 11% of its workforce, on the same day that it reported quarterly earnings.
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Intel is expected to report third-quarter earnings on October 27. Analysts are expecting earnings of 34 cents on revenue of $15.43 billion, based on Intel’s guidance of about 35 cents per share and $15 billion to $16 billion in revenue. In the same quarter last year, Intel reported earnings of $1.71 per share on sales of $19.19 billion.
Ever since Intel CEO Pat Gelsinger took the helm in early 2021, he’s faced an uphill battle to return the company to its former glory as a leading chipmaker.
That means expanding the company’s manufacturing capabilities, which, while a popular idea during a global chip shortage, has come under criticism because the multi-year plan is not only a severe strain on margins and profitability, but comes at a time when the PC -Demand has fallen sharply.
See: Analysts agree that the PC market is in the “steepest” slump since data collection began in the mid-1990s
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Last year, Gelsinger defended its capital plan and pledged that margins would remain “comfortably above 50%,” a pledge that nine months later had aged like milk when a challenging 2022 pushed margins to about 45% in the second quarter.
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