Intel has revealed a plan to cut around 17,500 jobs as it fights to revitalize its struggling manufacturing business.
The company revealed earlier this week it was likely to cut jobs, and has now confirmed it will reduced its workforce by around 15 percent.
CEO Pat Gelsinger told Reuters he wants “more people in the field.”
He said: “I need fewer people at headquarters, more people in the field, supporting customers.”
The company also predicted third-quarter revenue would fall below market expectations.
It is contending with decreased spending on traditional data center semiconductors and shifts focus to AI chips, where it is currently trailing its competitors.
Intel had 116,500 employees as of June 29, excluding some subsidiaries.
The company indicated that most job cuts would be completed by the end of 2024.
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It is undergoing a turnaround plan centered on developing advanced AI processors and expanding its for-hire manufacturing capabilities to regain the technological edge it lost to Taiwan’s TSMC (2330.TW), the world’s largest contract chipmaker.
“I need fewer people at headquarters, more people in the field, supporting customers”
The cuts are part of plans to cut operating expenses and reduce capital expenditure by more than $10 billion in 2025, exceeding initial projections.
CFO David Zinsner stated during a post-earnings call Intel anticipates weaker consumer and enterprise spending in the current quarter, particularly in China.
Export licenses revoked in May negatively impacted Intel’s business in China during the second quarter, Zinsner noted. In May, Intel indicated that its sales would be affected after Washington revoked some export licenses for a customer in China.
Intel is also reducing its investments. It expects to cut capital expenses by 17% in 2025 compared to the previous year, bringing it down to $21.5 billion, based on the midpoint of a range the company forecasted. It anticipates these costs to remain relatively flat in 2024.
