Tech giant lays off 15,000 – aims to save billions

It's not going well for Intel. The IT giant is having a hard time competing in the AI race. After a billion loss during the last quarter, significant staff reductions are expected. The stock plummeted like a stone after the announcement.

» Updated:

» Published:

Tech giant lays off 15,000 – aims to save billions
Photo: Laura Rauch/AP/TT

Share this article

"Our costs are too high, our margins too low," says CEO Pat Gelsinger in a letter to the company's employees.

Intel, which among other things manufactures microprocessors, reports a loss for the second quarter of 1.6 billion dollars. A significant change from the loss of 437 million dollars the previous quarter.

Pat Gelsinger says the company must "stop all non-essential work". A savings package has been presented where 10 billion dollars will be saved by 2025. The cuts mean that over 15 percent of the workforce will be forced to leave. According to The Verge, this affects at least 15,000 employees.

Dominated for decades

In 2022, Intel also implemented major cuts, where many employees were forced to leave the company.

Intel was a dominant force on the semiconductor market for decades, but is losing customers to competitors.

The downturn in recent years is due to the company having difficulty taking a position in an industry where most things now revolve around artificial intelligence.

Among the competitors that have specialized in AI are Nvidia, which generates more than twice as much revenue per quarter as Intel, writes Bloomberg. Old arch-rival AMD is valued at over 100 billion dollars more than Intel by investors, while Taiwanese TSMC is considered to have the industry's best production.

According to Rasmus Jacobsson, an analyst at Redeye, Intel has never had the opportunity to jump on the AI train.

They have never worked with that type of chip, simply. So regardless of AI or not, they would have had a big challenge.

Intel has specialized in ordinary processors, unlike, for example, Nvidia, which makes graphics processors, which are the type of processor primarily used in the latest AI technology.

No illusions

Pat Gelsinger believes that Intel, which is upgrading its factories, is on the right track to catch up. The plan going forward is to bring home important manufacturing from contract work and increase efforts to develop better AI chips.

First, however, the finances must be put in order. The quarter's gross margin – what remains of revenue after production costs are deducted – was 35.4 percent. During its heyday, it regularly exceeded 60 percent.

When the New York Stock Exchange closed, Intel's share had fallen by 26.1 percent.

Corrected: An earlier text incorrectly stated the amount for Intel's previous quarter.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Taco Bell Plans Expansion into Sweden with First Stockholm Location

Taco Bell Plans Expansion into Sweden with First Stockholm Location

Russia's Central Bank Makes Smaller Than Expected Interest Rate Cut

Russia's Central Bank Makes Smaller Than Expected Interest Rate Cut

ECB Officials Divided on Future Interest Rate Decisions

ECB Officials Divided on Future Interest Rate Decisions

Klarna CEO Secures Billion-Kronor Loan to Buy Out Co-Owner

Klarna CEO Secures Billion-Kronor Loan to Buy Out Co-Owner

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Six Suspects in Consultant Scandal Face Charges After Spain Raid

Microsoft to Remove Teams from Office Package in EU Agreement

Microsoft to Remove Teams from Office Package in EU Agreement

UK Economy Growth Stagnant in July as GDP Remains Unchanged

UK Economy Growth Stagnant in July as GDP Remains Unchanged

German Inflation Rises to 2.2 Percent in August

German Inflation Rises to 2.2 Percent in August

Stockholm Stock Exchange Sees Modest Gains Amid Global Market Upswings

Stockholm Stock Exchange Sees Modest Gains Amid Global Market Upswings

Insurance Guide: What to Know After Västernorrland Floods

Insurance Guide: What to Know After Västernorrland Floods

Asian Stock Markets Rise on Week's Last Trading Day

Asian Stock Markets Rise on Week's Last Trading Day

Trump Seeks Court Approval to Dismiss Fed Member Before Rate Decision

Trump Seeks Court Approval to Dismiss Fed Member Before Rate Decision

Warner Bros Discovery Surges on Wall Street Amid Paramount Bid Rumors

Warner Bros Discovery Surges on Wall Street Amid Paramount Bid Rumors

US Inflation Matches August Expectations

US Inflation Matches August Expectations

ECB Keeps Interest Rates Steady

ECB Keeps Interest Rates Steady

Novo Nordisk to End Remote Work in 2024

Novo Nordisk to End Remote Work in 2024

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Switzerland Suggests Moving Gold Refineries to USA to Lower Tariffs

Klarna's Stock Market Debut Attracts Swedish Small Investors

Klarna's Stock Market Debut Attracts Swedish Small Investors

Oil Demand Surpasses Expectations for 2026, Says IEA

Oil Demand Surpasses Expectations for 2026, Says IEA

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent

Stockholm Stock Market Rises Slightly as Rusta Drops 13 Percent