1. Intel plans to lay off thousands of employees? More than
Foreign media reported that Intel plans to lay off employees significantly, which may affect thousands of people in order to reduce costs and cope with the shrinking demand for personal computers.
Bloomberg News reported on the 12th that Intel announced layoffs as early as this month, which may be the same day when it released its third-quarter financial report on the 27th. As of July, Intel has 113,700 employees. The layoffs in some departments such as Intel's sales and marketing may reach about 20%.
Intel's main personal computer processor business is facing a sharp decline in demand. The company warned in July that its 2022 sales would be about $11 billion lower than previously expected. Wall Street analysts predict that Intel's third-quarter revenue will drop by about 15%.
Intel executives said on the second quarter earnings call this year that the company admitted that it could make changes to boost profit margins. Intel CEO Pat Gersinger said at the time: "In 2022, we are also reducing core spending and will seek additional action in the second half of this year."
Intel's last sharp layoffs were in 2016, affecting about 12,000 jobs, accounting for 11% of the total number of employees. Like many technology companies, Intel stopped recruiting new products earlier this year due to worse market conditions.
Gersinger began taking the helm of Intel last year and has been committed to revitalizing Intel. However, even before demand for personal computers declined, the work was difficult. Bloomberg commented that Intel has lost its long-term technological advantage, and its executives acknowledge that the company's innovative culture has withered in recent years.
2. Why does the giant Intel lay off employees too?
We see the news that the famous technology giant Intel announced that it would lay off employees, and many people will be surprised. What's going on? After all, a super leading company like Intel has not laid off employees for many years, but now it is going to carry out large-scale layoffs. What is the reason for this?
First of all, Intel's current layoffs are actually a normal phenomenon. This is because Intel has 110,000 employees, with a considerable number of people. It can basically be said to be a giant in the chip industry. However, the entire market is facing a trend of rapid decline in demand for personal computer processors. Currently, Intel's six-year sales are about US$11 billion lower than the previous expectations. Some analysts even expect Intel's revenue to drop by nearly 20% in the third quarter. Under such a background, Intel's days of making money every day have actually passed, which is a problem that Intel must solve at present. Faced with relatively large operating pressure, Intel actually has no choice but to lay off employees.
Secondly, let's observe that Intel's last large-scale layoffs occurred after 2016. In addition to making some business adjustments, Intel has not actually made large-scale layoffs. Now it has restarted this plan. In fact, the most core reason is that in the process of market development, Intel has actually faced relatively large development pressure, and Intel is also worried about the impact of the economic recession. So, like many technology companies, Intel has frozen its recruitment at the beginning of this year. For the current Intel, it is actually a relatively embarrassing state. On the one hand, the market demand for the entire processor is in decline, and on the other hand, Intel's stock price is also declining on a large scale. From 2022 to today, Intel's stock price has dropped by more than 50%. Therefore, under such a broad background, Intel has had to make certain layoffs.
3. From the perspective of long-term market development, Intel is still in a monopoly position in the computer market, but its chip advantages in the mobile market, especially in smart devices, are not obvious. If the overall demand for computers has become the general trend, the pressure Intel is currently facing is conceivable. Therefore, for the current entire market, Intel's future development ultimately depends on how the demand of the entire market changes. If the demand for computers continues to rise in the future, Intel's development is still worth promising, but if the demand for computers begins to decline and this trend is irreversible, the problems faced by Intel will only become bigger and bigger. This is actually a cyclical law of the development of the entire market. Everyone must understand the trend of the entire market.
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