PC growth slows: Intel to cut thousands of jobs, up to 20% in some divisions

In an effort to cut costs and deal with a slowing PC processor market, chip giant Intel Corp is planning massive layoffs that could run into the thousands, people familiar with the matter said. Intel could announce job cuts as early as this month, people familiar with the matter said, a decision the company plans to announce when it reports third-quarter earnings on Oct. 27. Some departments, including Intel's sales and marketing departments, will be the hardest hit, with layoffs of as much as 20%. As of July this year, Intel had 113,700 employees.

Intel's last major layoff was in 2016, when the company cut about 12,000 jobs, or 11% of its workforce. Now, Intel is facing a sharp drop in PC processor demand and has struggled to regain market share lost to rivals such as AMD. In July, the company warned that 2022 revenue would fall by about $11 billion from its previous forecast. Analysts expect Intel's third-quarter revenue to drop nearly 20%. Intel's once-enviable profit margins have also shrunk sharply, 15 percentage points lower than their historical margins of about 60%.

Separately, Intel plans a greater separation of decision-making between chip designers and chip-making factories, part of CEO Pat Gelsinger's plan to overhaul the company and improve returns. The new architecture, disclosed by Kissinger in a letter to employees on Tuesday, is designed to allow Intel's network of factories to operate like chip foundries, taking orders from Intel engineers and outside chip companies on an equal footing. In the past, Intel used its factories almost exclusively to make its own chips, but that changed last year when Kissinger set up a foundry chipmaking unit.