Intel layoffs loom: Chipmaker reportedly plans to make its biggest job cuts in years

News broke late last night that Intel is reportedly preparing to lay off potentially thousands of workers in what would be the chipmaker’s biggest round of job cuts since 2016. The report comes from Bloomberg, citing people familiar with the situation, but Intel has not publicly commented on its plans yet. Here’s what you need to know.

• What’s happening? Late Tuesday, Bloomberg released a report that Intel was readying “a major reduction in headcount” in which “thousands” of jobs could go. The news sent shivers through a tech industry already battered by layoffs in recent months; understandably, the report is a major concern for Intel employees. If the report is accurate, the job cuts will likely be the largest since the chipmaker laid off around 12,000 workers in 2016—then about 12% of its headcount.

• How many jobs could be lost at Intel this time? If the report is accurate, Bloomberg says the job cuts will likely number “in the thousands.” As of July 2022, Intel had 113,700 employees. If the company matched 2016’s job cuts, then 12% of the current workforce equals nearly 14,000 employees. However, there is no suggestion yet that the job cuts could be equal in measure.

• Are certain jobs more likely to go than others? That’s unknown. But Bloomberg reports that certain divisions at Intel, such as its sales and marketing group, could see around 20% of its staff let go.

• Why is Intel likely to cut jobs? In short, profits aren’t great. Most recently, in July, Intel warned that profits for its current fiscal year may be $11 billion lower than the company originally anticipated. The company’s margins have also shrunk.

• Why are Intel’s profits down? There’s no one factor, but rather a storm of bad externalities. One element is that PC sales are falling. As Intel makes the majority of chips found in PCs, that’s bad news for the company. IDC reported that PC sales fell 15% year-over-year for the latest third quarter. It also doesn’t help that Apple, formerly a huge Intel customer, is now making its own chips for its Macs. But Intel is also seeing significant competition from other PC chipmakers like Nvidia and AMD. And most recently, the technology Intel can sell to China may be hindered under new export curbs the White House announced last week.

• What has Intel said about the reported layoffs? Fast Company has reached out to Intel for comment on the report and we’ll update this post when we hear back. But Intel has not specifically announced any job cuts as of yet. However, earlier this year Intel CEO Pat Gelsinger said, “We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year.” Job cuts may be one of those “additional actions.”

• How could the layoffs impact Intel investors? Bloomberg notes that Intel may also cut its stock dividend to shore up its cash flow; however, such a move is not a lock yet.

• How has the layoff report affected Intel stock? The news of expected layoffs hasn’t impacted the stock much. However, at the time of this writing, INTC stock is up 1% in pre-market trading, suggesting investors see layoffs as a way to help boost the company’s bottom line.

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