Intel to lay off 15,000 staff as part of $10 billion cost savings plan

Intel will lay off approximately 15,000 staff as it enacts a new $10 billion cost saving plan.

In a statement to employees following its Q2 2024 earnings call, company CEO Pat Gelsinger said the job cuts would impact 15% of its workforce. Most redundancies will be completed by the end of the year.

Gelsinger said that Intel's cost structure is “not competitive”. He stated that the firm's revenue in 2020 was $24 billion higher than last year, “yet our current workforce is actually 10% larger now than it was then”.

As part of the move, Intel plans to offer a “ company-wide enhanced retirement offering” for eligible employees and “broadly” offer an application program for voluntary departures.

"Tougher" outlook

“This is painful news for me to share,” said Gelsinger. “I know it will be even more difficult for you to read. This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history.”

He added: “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.”

During Q2, Intel posted a 1% year-over-year decline in revenue to $12.8 billion. The company also reported a $1.6 billion loss for the quarter, compared to a $1.5 billion profit during Q2 2023.

“Second quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity,” said Intel CFO David Zinsner.