Intel is now joining the list of tech companies putting a pause on their hiring.
Intel, one of the world's largest chip makers, is now putting a temporary stop to onboarding talents around the world. During the past few years, the chip shortage has become increasingly prevalent.
Due to the pandemic, the demand for entertainment in modern technology has skyrocketed, resulting in these types of businesses having increasing sales revenue. However, things might be slowing down a bit.
Intel's Talent Acquisition
Intel's client computing department is putting an end to all hiring and putting a halt on all job requisitions until further notice.
According to Reuters, "the memo said that some hiring could resume in as little as two weeks after the division re-evaluates priorities and that all current job offers in its systems will be honored."
According to the memo, Intel is going to impose a block on hiring for the client computing department for the next two weeks. This group is responsible for developing PC chips that are used in desktop and laptop computers.
In the most recent quarter, slightly more than half of the revenue earned by the manufacturer came from the client computing department, which is Intel's largest business in terms of sales.
Intel believes that it will be better able to weather the uncertainties of macroeconomic conditions, carry out business strategy, and achieve commitments to its customers, shareholders, and employees if they spend more time concentrating on and prioritizing their spending.
It is assumed that one of the reasons behind this is that Intel's earnings projections for the second quarter were lower than what was anticipated in April. The company cited decreased sales of PC chips as the primary reason.
Intel's Contributing Factors
As reported by Fortune, Intel's CFO, David Zinsner, stated at a Bank of America conference that the company's profits are going to be impacted by the macroeconomic conditions.
Zinsner added, "The circumstances at this point are much worse than what we had anticipated coming into the quarter." Zinsner stated a few factors that are massively contributing to the company's decrease in sales.
First, due to the widespread disruptions in the supply chain, customers of Intel are still having trouble procuring matched sets, which refers to the full collection of components that are required to create a device. Device manufacturers are forced to reduce production when they do not have access to a full set, which can result in Intel losing orders even when there are no supply difficulties.
Second, the CFO of Intel also brought up the issue of China's prolonged lockdowns due to its recent COVID-19 outbreak. The halt in manufacturing disrupted the supply chain. Unfortunately, it is still continuing to produce a limited number of products.
Chip production in China experienced a year-over-year decrease of 12.1% in April. It has been reported that the production rate has reached its lowest capacity since December 2020.
In addition to that, consumer demand has also decreased since the pandemic has started easing in some parts of the world. Lastly, there is also the increasing inflation rate in some countries.
Intel's Pause in Hiring
Intel is not the only company that is pausing its hiring nowadays. Big firms such as Netflix, Peloton, and Tesla are also taking a step back in hiring.
Tesla's CEO, Elon Musk, has recently stated it might cut back jobs by 10% due to the economic state and a possible global recession.
Just like Intel, Peloton is also experiencing a decrease in demand due to the easing of the pandemic. The company has also stated at the beginning of the year that it will most likely cut jobs.
