The low sales of personal computers (PC) prompted the chip maker Intel Corp. to engage in cost-cutting activities that will likely result in significant layoffs. According to Bloomberg, Intel plans to make a “major reduction in headcount,” with thousands of employees set to lose their job. The company currently employs 113,700 workers.
Reportedly, the layoff plans will become official at some point this month, with the announcement set to coincide with the release of Q3 earnings results. Some of Intel’s divisions will see more reduction than others, with sales and marketing set to have its workforce trimmed up to 20%.
The demand for PCs has been moderate in recent months after the sales skyrocketed during the pandemic. This has particularly hurt Intel considering PC processors make up the majority of the company’s business. As a result, Intel was forced to lower its forecasts for the year and now expects $65 billion to $68 billion in revenue compared to previous estimates of $76 million.
The layoffs won’t be the only big step Intel is determined to make in attempts to deal with recent challenges. Intel CEO Pat Gelsinger recently sent out a letter to the staff in which he unveiled plans to “create greater decision-making separation” between design and manufacturing teams. However, analysts are unsure whether these decisions will be enough to start changing the company’s fortunes.
Intel stock went up around 1% after the Bloomberg report went live and closed at $25.33 per share on Wednesday. The company’s shares are still 52.40 down year to date.