According to a report by Bloomberga Intel may be laying the groundwork for reducing its headcount. The purpose of this mass layoff would be to lower costs amid slumping PC sales. The news, according to the website, comes from “people with knowledge of the situation”. The company is expected to announce a decision by the end of this month.
According to the source who spoke to the BloombergIntel treats this possible decision as the “resolution” of an internal problem, which it prefers not to make public.
However, not all divisions may be affected equally. According to the report, sales and marketing teams, for example, will suffer a significant impact and could lose up to 20% of their staff.
The last time Intel carried out mass layoffs was in 2016, when announced the dismissal of 12 thousand employees — something like 11% of its staff at the time.
The company is expected to make the cut the same week it delivers its fiscal third-quarter earnings report. The release of these results is scheduled for October 27th.
Despite expressive, PC market is in decline
As much as Intel chooses not to make public the reasons for considering this mass layoff, the Bloomberg pointed out that it may be related to the decline in PC sales.
Last August, both Intel and AMD stated that the outlook for PC sales in the fiscal third quarter would no longer be very optimistic.
like the Bloomberg recalls, in the second quarter of 2022, Intel reported overall revenue of $15.32 billion. However, the value was 22% lower than the same period last year.
This was not favored by the company’s shareholders. At the time, Pat Gelsinger, Intel’s chief executive, said the company would take “additional action in the second half of this year” but did not mention the possibility of layoffs.
The problem, however, can be generalized. according to one Gartner surveyglobal PC sales totaled 68 million units in the third quarter of 2022, down 19.5% from the same period last year.
According to the analysis, this is the biggest drop on record since the company began studying the market in the mid-1990s.
For Mikako Kitagawa, director analyst at Gartner, among the possible reasons that explain this decline are: global geopolitical and economic uncertainties and the lack of need on the part of users, who may have bought a new device in the last two years and are satisfied.