Intel has announced that it will be laying off 15,000 employees in an effort to save around $10 billion in costs in 2025. The cost-cutting plan comes after bleak second-quarter financial results.
“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,” said CEO Pat Gelsinger in a memo to employees.
Intel's Q2 2024 results showed a $12.8 billion profit, down 1% year-on-year, and falling short of analyst expectations. CEO Pat Gelsinger called the results "disappointing" despite hitting key milestones. This contrasts with Nvidia's significant profits from AI, reporting $26 billion in Q1 2024, an 18% increase year-on-year.
Aside from the reported losses, the uncertainty around artificial intelligence (AI) could possibly be fueling these cost-cutting measures, as more investors and financial forecasters are showing concern about the extended timeline to achieve profitability.
