In This Article
- Intel Plans Mass Layoffs ahead of Earnings Report
- Is AI the Reason Behind Intel Layoffs?
Bloomberg posted a report on Tuesday showing that Intel is going to cut 20% of its workforce, and the intent behind this action is not clearly discussed and will be disclosed this week. It is considered Intel’s biggest layoff round, and according to resources, the major reasons are the focus on more engineering roles, bureaucracy, and cost-cutting.
Remember that Intel appointed the new CEO, Lip-Bu Tan, who started working on March 18, and this is the first restructuring move under his supervision. From 2009 to 2021, he worked as the CEO of chip-making company Cadence Design Systems and has great leadership characteristics.
Intel is taking the step for the layoff because for the last three years, the company has been facing a decline in revenue due to advancements in technology and tough competition. The big tech companies like Nvidia and AMD are in the leading position, and the new CEO aims to maintain the better position.
Intel Plans Mass Layoffs ahead of Earnings Report
Intel is one of the biggest names in chip-making, but the recent reports show that the company is facing a tough time. At this time, Lip-Bu Tan replaced Pat Gelsinger last year and is coming up with new strategies to get its old position in the market.
The current data show that the company has 108,900 employees working at the moment, and it has laid off around 15,000 employees in 2024. This was done when the company faced a loss of $1.6 billion. This time, the decision is bigger than this, and more than 21,000 employees are going to lose their jobs because the CEO announced its intent to reduce the loss to $10 billion.
He wrote,
I’m confident we can turn our business around. We will push ourselves to develop the best products, listen intently to our customers, and hold ourselves accountable to the commitments we make so that we build trust.
Is AI the Reason Behind Intel Layoffs?
The digital era is all about making powerful systems through advanced chips that are capable of working with the latest technologies. Among others, the most critical and advanced technique is artificial intelligence, and it is ruling the tech industry.
After the powerful AI models and training methods are represented by the companies, the chipmakers like Nvidia and ARM have taken advantage of their latest working methods and created powerful chips to train the AI models. Intel is behind them in the race and facing a large loss.
The revenue loss and the great number of employees are making things difficult for the company, and the previous CEO’s layoff decision last year was not enough to maintain the balance.
This time, Lip-Bu Tan took the responsibility and said in his first interaction as the CEO that the company has to make tough decisions to deal with the current situation.
Other companies like Google, Meta, and Microsoft are announcing the new round of cuts to maintain their AI development. Intel’s decision has made us think if the AI is the reason behind the decision, and the answer may be ‘Yes’.
AI is leading the digital world, such that we see how Weborik Hub is integrating AI into the web solutions of its clients to make them efficient and flawless. Similarly, most of the repetitive tasks are assigned to AI, and the respective person loses their job.
The industrial revolution is compelling companies to work more with and from AI; therefore, they are making the decisions to maintain the expenses.
Intel is scheduled to release its Q1 report on Thursday, and it will clear up the restructuring progress, future cost plans, and the competitive position. The experts suggest that the company must work on the AI chips that may work in the generative AI models and high-performance GPU computing.
