Intel Announces 10% Budget Cut and Potential 20% Layoffs as Market Challenges Persist

Recently, analysts from consulting firm SemiAnalysis took to Twitter to announce that Intel is planning to cut its budget by 10%. This decision is expected to impact their Client Computing Group (CCG) and Data Center Group (DCG), with potential layoffs reaching up to 20%. In response to this, Tom's Hardware reported that Intel issued a statement acknowledging their efforts to accelerate their strategy while navigating the challenging macroeconomic environment. They expressed their focus on cost reduction and efficiency improvement through various measures, including downsizing certain business areas and specific functional departments.

Intel stated that they will continue investing in core areas of their business, particularly their manufacturing operations in the United States, to ensure the company's long-term growth prospects. They acknowledged that these decisions are difficult and emphasized their commitment to treating affected employees with respect.

The report indicated that Intel's statement confirmed layoffs in specific areas but did not specify the number of affected employees or the departments that would be affected.

It is worth noting that Intel recently reported its largest quarterly loss in history at the end of April. This significant decline in revenue, down 36% to $11.7 billion compared to the same quarter in 2022, was attributed to a sharp decrease in semiconductor or chip demand for PCs and smartphones. The Client Computing Group (CCG) revenue, responsible for Intel's CPUs, GPUs, and other PC components, experienced a 38% year-on-year decrease, amounting to $5.8 billion. Intel attributed the decline in this segment's revenue to the decrease in PC demand and original equipment manufacturers focusing on clearing existing Intel component inventory.