The downfall of Intel, the giant tech company, 15k workers released from work and more. update 8/25 Intel makes deal with Washington

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Intel is laying off over 15,000 employees and will stop ‘non-essential work’​

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After losses, the chipmaker is cutting $10 billion in costs.​

Intel’s on a long, long road to recovery, and over 15,000 workers will no longer be coming along for the ride. The chipmaker just announced it’s downsizing its workforce by over 15 percent as part of a new $10 billion cost savings plan for 2025, which will mean a headcount reduction of greater than 15,000 roles, Intel tells The Verge. The company currently employs over 125,000 workers, so layoffs could be as many as 19,000 people.
Intel will reduce its R&D and marketing spend by billions each year through 2026; it will reduce capital expenditures by more than 20 percent this year; it will restructure to “stop non-essential work,” and it’ll review “all active projects and equipment” to make sure it’s not spending too much.

“This is painful news for me to share. I know it will be even more difficult for you to read,” reads part of a memo from Intel CEO Pat Gelsinger to staff, which you can also read in full at the bottom of this post.

“We will reduce layers, eliminate overlapping areas of responsibility, stop non-essential work...”
The company just reported a loss of $1.6 billion for Q2 2024, substantially more than the $437 million it lost last quarter. “Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” admitted Gelsinger in the company’s press release. “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI,” he writes in his employee memo.

Second quarter revenue was $12.8 billion, down just 1 percent year over year, and it’s not like all of Intel’s businesses are failing. While Intel has absolutely been losing money on its chipmaking Foundry business as it invests in new factories and extreme ultraviolet (EUV) lithography, to the tune of $7 billion in operating losses in 2023 and another $2.8 billion this quarter, the company’s products themselves aren’t unprofitable.

Almost all the losses this quarter and last quarter came from Foundry, while its sales continue to stay relatively stable and its PC and server businesses stay profitable. (The PC sales slump ended earlier this year.) The company is also set to receive up to $8.5 billion in US government funding from the CHIPS Act.

But investors didn’t seem happy that the company kept itself on a knife’s edge: over the past two years, before this quarterly loss, it had continued to swing between losses and profits overall, for just $1.1 billion in cumulative profit between Q2 2022 and Q1 2024. “Intel is now the worst-performing tech stock in the S&P 500 this year,” CNBC wrote in April

From a tech leadership perspective, Intel’s not yet a big player in AI server chips like Nvidia (maybe not even a notable small one like AMD), its relatively recent entry into graphics has yet to impress, and it had to overhaul its flagship laptop chips significantly to address the existential threat of Arm chips from the likes of Qualcomm and Apple, which can offer more battery life than Intel. Like competitors, the company now partially relies on TSMC, not just its own foundries, to help produce some of its most advanced chips.

Microsoft recently followed Apple’s lead in ditching Intel chips for its latest slate of consumer hardware, including the Surface Laptop and Surface Pro, and launched its Copilot Plus PC initiative exclusively with Qualcomm, without waiting for Intel (or AMD)’s new flagship laptop chips to join them. Intel is currently dealing with two generations of potentially defective desktop CPUs, though the company currently believes it can mitigate the issue with a software update and doesn’t currently plan recalls.

On the company’s earnings call today, Intel CFO David Zinsner just suggested that the company’s next flagship AI laptop chip, Lunar Lake, won’t be enough by itself to turn things around.

Continued....

Intel is laying off over 15,000 employees and will stop ‘non-essential work’

That’s a lot of layoffs.

www.theverge.com

 

[mrcmd187]

Intel was the Cadillac of microchip's but other cheaper and way better manufactures came in. Even though PC gaming is on fire Intel is not the chip people run to when building a rig they really didn't change with the time and smart device market didn't help them out either. None of our PC's or severs at work use Intel.

 

[jawnswoop]

No wonder my computer be fucking up with Intel chip with them overcharging for computers.

 

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Seem like this definitely would not have been the case. Especially with all of the focus on tech over the last fear years



“@drexelmildraff75809 days ago
I've got a news flash for you about Chinese tech graduates. I went to grad school over 30 years ago in a highly rated computer science department and HALF the students even back then were Chinese, and 20% were from India, oh, and there were some Europeans, too. How many Americans from American schools...only a few.”

 

[easy_b]

Joe Biden doesn’t have anything to do with that. What Joe Biden did is broaden out the chip sector away from Intel. There is other companies now making chips so don’t have a strong hold on the market in America anymore. in other words, President Biden killed Intel monopoly on the chip sector in America. Now I do not like those people being laid off and trust me. I got laid off last year so I know the feeling but at the same time in the long run this may be a good thing for American computer chip manufacturing because you need diversity Whoopie chips or you could have an incident that happened a few years ago.

 

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The Great Tech Reset: Unpacking The Layoff Surge Of 2024​

Emil Sayegh
Aug 19, 2024,

Steep Tech Layoffs Follow Over-Hiring Spree

getty

In a stunning reversal, the tech industry—once the unstoppable engine of modern innovation—has laid off over 124,000 workers in 2024 alone. What’s driving this wave of layoffs, and what does it mean for the future of work in one of the world’s most dynamic sectors?

The Layoff Landscape​

In August 2024, Intel sent shockwaves through the market by announcing a 15% reduction in its global workforce—roughly 15,000 jobs. Just days later, Cisco Systems announced plans to lay off 7% of its employees, marking its second round of job cuts this year as the company shifts focus to rapidly growing areas like artificial intelligence and cybersecurity. Earlier in February 2024, Cisco laid off more than 4,000 employees.


These are not isolated incidents. According to Layoffs.fyi, 384 tech companies have laid off more than 124,000 employees in 2024, adding to the 428,449 tech workers who lost their jobs in 2022 and 2023. While the broader labor market has shown some resilience, the tech sector's cuts are particularly visible due to the sheer scale of these companies. Even a small percentage reduction translates to thousands of lives and families upended.

Why Are Layoffs Happening?​

A confluence of factors has created the perfect storm for the current wave of layoffs in the tech industry:


1. Inflation And Higher Interest Rates: The US Federal Reserve’s aggressive rate hikes in 2022, aimed at curbing the highest inflation rates in 40 years, have had far-reaching intended and unintended consequences. While these measures have begun to tame inflation, they have also significantly increased the cost of borrowing and servicing debt. Companies, particularly those in the tech sector, are now forced to scale back on their growth investments and hiring as they divert hard-earned cash to cover their debt obligations. The impact has been severe for tech firms that borrowed heavily during a decade of near-zero interest rates and abundant capital, leading to deep cost cuts, austerity measures, and inevitable layoffs.

2. Economic Downturn And Recession Fears: Despite pockets of strength, the U.S. economy remains on shaky ground, further complicated by the turbulence of an upcoming presidential election. Recession fears, fueled by government debt concerns, geopolitical tensions in Ukraine and the Middle East, and the lingering effects of the pandemic, have prompted companies to tighten their belts. In the tech industry, where profitability per employee is critical, layoffs have become a necessary cost-cutting measure as firms brace for economic uncertainty.

3. The AI Factor: Artificial intelligence is profoundly reshaping the tech landscape, creating both opportunities and threats. While AI promises to generate new jobs and boost productivity, it also poses a significant risk to those who fail to adapt. IBM’s decision to cut 3,900 jobs in its marketing and communications division while freezing hires for roles that could be replaced by AI is a stark illustration of this trend. The shift toward AI-driven efficiency is forcing companies to rethink their workforce strategies.

4. Pandemic Over Hiring: During the pandemic, tech companies embarked on an overzealous hiring spree, driven by the belief that the surge in digital demand would be permanent. In response to challenges such as the Great Resignation, and the rise of Quiet Quitting, companies scrambled to fill positions, offering unprecedented perks, work-from-anywhere arrangements, and generous incentives. Firms like Meta nearly doubled their workforce, only to find themselves overstaffed as the world began returning to pre-pandemic norms. Now, these companies are urgently correcting course, leading to widespread layoffs.


5. Outsourcing And Offshoring: The American workforce may have inadvertently weakened its position during the Great Resignation and Quiet Quitting movements, compounded by the ongoing debate and drama over returning to the office. In response, companies are increasingly turning to in-situ talent in Latin America, Eastern Europe, the Middle East, Africa, and Southeast Asia, where they can hire highly educated workers at a fraction of the cost. The threat to American jobs is not only from AI but also from a global workforce that is willing to work hard, adapt, and deliver without the associated complexities.

The Human Impact​

The fallout from these layoffs is deeply personal and far-reaching. Behind every statistic is a person—a friend, a colleague—who may have a family to support, college tuition to pay, and bills to cover. These are often highly skilled professionals who now face an uncertain future. This wave of layoffs is reminiscent of the dot-com bust of the early 2000s, but with a crucial difference: today’s tech workers are older, more experienced, and often more deeply entrenched in their careers. The psychological and financial toll can be overwhelming, but it doesn’t have to be. For example, a colleague of mine, a seasoned software engineering project manager with over 10 years of experience, found herself jobless overnight and is now navigating the uncertainty of the job market. I suggested she explore specific opportunities in the data center, cybersecurity, customer experience outsourcing, and data science industries, where there is strong demand for skilled U.S.-based project managers. This moment calls for a great reset in how we address this crisis and prepare for the next phase of the industry.

The handling of these layoffs has sparked significant criticism. In many cases, companies have left employees in the dark for weeks or even months, fostering a toxic atmosphere of fear and uncertainty. It’s a stark reminder that, despite claims that employees are their greatest asset, companies often sacrifice their workforce first in times of crisis—even when posting record profits. For example, Microsoft laid off 1,900 workers just five days before reporting a 17.6% increase in revenue to $62 billion, while Amazon dismissed a thousand workers despite a 14% rise in revenue to $170 billion. To make matters worse, some companies are rumored to be reducing severance packages right before layoffs, further eroding trust.

Looking Ahead​

The current wave of layoffs raises critical questions about the future of work in the tech industry. Will companies continue to prioritize AI investments at the expense of human workers? Will the industry return to its previous growth trajectory, or are we entering a new era of consolidation and efficiency? And most importantly, how can companies better support their employees through these turbulent times?


As we navigate these challenges, it’s clear that the tech industry is at a crossroads. The decisions made today will shape the future of the industry—and the lives of millions of workers—for years to come.

In this period of uncertainty, resilience is crucial for those affected. Equally important is the need for the community to come together with compassion—helping one another identify new opportunities, offering resume reviews, providing career advice, and setting realistic expectations. While the tech sector may be contracting, the demand for skilled workers remains strong. For example, demand for data center construction is stronger than ever, driven by the insatiable thirst for AI. Starting new ventures should also be considered a viable path forward for those impacted. Whether it’s pivoting to new roles, upskilling in AI, or exploring emerging fields, there are numerous paths to success. The key is to stay adaptable, keep looking ahead, and continue leveraging your network and resources.


The tech industry has always been defined by its ability to innovate and reinvent itself. Now, as it faces one of its greatest challenges, it must do so once again—not just in terms of products and services, but also in how it values and treats its workforce. The companies that succeed will be those that not only weather the current storm but emerge stronger, leaner, and with a more resilient internal culture. This is a once-in-a-lifetime opportunity for industry leaders and workers alike to seize this moment of transformation and build a stronger, more sustainable future together. After all, it’s the people who make innovation and growth possible.

 

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