Intel to layoff over 15,000 staff following massive net loss

Intel has announced it will be cutting more than 15,000 jobs as part of a $10bn cost-saving plan after the company reported a net loss of $1.6 billion for Q2 2024. The company will also be cutting capex by 20 percent, and reducing non-variable cost of goods sold by roughly $1 billion in 2025. Intel said it wants to eliminate complexity by stopping overlapping areas of responsibility and what it calls "non-essential work."

CEO Pat Gelsinger wrote in a note to employees after the second-quarter 2024 earnings were published: “This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history. Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected."

Intel’s Data Center and AI (DCAI) and Network and Edge (NEX) segments also reported YoY revenue decreases, albeit in the single figures, dropping by three percent to $3bn and one percent to $1.3bn, respectively. CFO David Zinsner said in an earnings call.: "We expect sequential growth in the data center through the second half as demand for traditional servers improves modestly. We're making the early inroads on the AI side of data center and that's only going to grow as we go into next year."