Intel Will Lay Off Over 15,000 Employees To Reduce Costs

The American tech company Intel announced a massive layoff of 15% of its workforce—over 15,000 employees—by the end of 2024 to reduce costs in a press release this Thursday. In the second-quarter report, the company explains that it is part of the new cost-reduction plan to save $10 billion by 2025.

The company explained that the financial performance during this second quarter was “disappointing,” and these actions, along with the launch of the new Intel 18A in 2025, will help Intel regain leadership and strength in the market.

Pat Gelsinger, Intel CEO, sent a note to current employees. “This is painful news for me to share. I know it will be even more difficult for you to read,” wrote Gelsinger. “These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career.”

Gelsinger explained that the current workforce is 10% larger than it was in 2020, when they made $24 billion more than last year in revenues. Intel will also change internal bureaucracy and current operational systems to simplify processes and accelerate workflows.

The Intel CEO also promised to provide more details during an internal meeting, and retirement offerings for selected employees as well as a voluntary departure program next week.

This announcement comes months after U.S. President Biden approved an agreement with Intel and gave the company $8.5 billion in direct funding to support the construction of new facilities in the country, along with $ 11 million in loans in March. According to the official statement from the White House, the government expected that investment to create nearly 30,000 new jobs for Americans.

Regarding the company’s future, Gelsinger said the path was not going to be easy. “We are making the changes necessary to build on our progress and usher in a new era of growth,” wrote the CEO.

Intel is trying to stay afloat and compete against its strong rivals like AMD and Nvidia—which recently announced a new flagship AI model for the Chinese market and has been making big efforts this year to develop affordable AI chips.