Intel strategy: Up to 10,000 jobs could be eliminated

Issues of a chip manufacturer Up to 15,000 positions at Intel affected—new plan as a contract manufacturer

2024-08-05 Updated on 2024-08-02 From Hendrik Härter | Translated by AI 2 min Reading Time

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At Intel, up to 15,000 jobs are to be cut. With the layoffs, the company wants to save money and fight many homemade problems. The competition is large and new markets are in demand. One strategy would make Intel a competitor of TSMC.

Intel plans to cut up to 10,000 jobs. More money should flow into AI chips and they want to act as a contract manufacturer.(Image: Intel) — Intel plans to cut up to 10,000 jobs. More money should flow into AI chips and they want to act as a contract manufacturer.
(Image: Intel)

[Update 2.8.]: Intel has now announced the official figures for its cost-cutting measures: according to official statements, the tech company wants to lay off 15 percent or around 15,000 employees. With this, the company aims to save 10 billion US dollars in costs in the coming years. This was reported by the daily news. In addition, from the fourth quarter onwards, the corporation initially wants to stop paying dividends to shareholders. Intel once dominated the chip industry, but then fell behind. Last year, the company recorded a loss of just over 1.6 billion dollars.

Whether in smartphones, household appliances, or industrial robots, hardly anything works without computer chips. Now, according to a media report, the US corporation Intel wants to cut thousands of jobs. Extensive savings plans have been known for more than a year. It is speculated that up to 10,000 jobs could be affected by the cost-cutting measures. Intel has not officially confirmed this. The company employs around 110,000 people worldwide. This does not include employees from the spin-off business units.

Intel is fighting on several fronts

Intel's pioneering role has declined significantly in recent years. CEO Pat Gelsinger is investing heavily in research and development to strengthen the semiconductor industry again. In the spring, Intel and the US Department of Commerce signed a non-binding letter of intent that allows direct funding of up to 8.5 billion US dollars for Intel's commercial semiconductor projects under the CHIPS and Science Act.

The battle in the semiconductor industry is tough. Competitor AMD has been able to catch up massively in recent years. In addition, there are current problems with desktop processors. Intel refuses a recall, even though the damages are irreversible. Many users want to switch to AMD processors.

New players are entering the market

And new players like Nvidia have made advancements in semiconductor technology, especially in artificial intelligence. Therefore, Intel also has to spend a lot of money on these chips.

Building a chip production from scratch is not easy and very expensive. Several complex machines have to interact with one another. In addition, software is required with which the circuit diagrams can be created. The created circuit diagrams for chip production must be broken down to the individual machines. Expensive clean rooms are also involved. And if a mistake happens there, it can cost millions.

Intel plans to produce more for other customers with its know-how. The company would be a direct competitor of TSMC. The factory, which is to be built at the German location in Magdeburg in the coming years, is part of the project to work more as a contract manufacturer. (heh)

Intel's CEO Pat Gelsinger (left) in conversation with US President Joe Biden. The President of the United States visited the semiconductor production facility in Chandler, Arizona, on March 20, 2024. (Image:Intel Corporation)

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