Intel announced its decision to downsize the company by over 15% as the company attempts to cover its continuous decline in revenue.
The company currently houses over 125,000 employees and is expected to lay off around 19,000 workers with the decision.
Intel Downsizes Company Amid Continuous Loss
In a press release, the company shared its second-quarter financial result which is down by one percent year over year. Intel decided to reduce spending by starting a headcount reduction among its employees.
"By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," said David Zinser, Intel's chief financial officer.
He also added that the company's actions are expected to improve liquidity and reduce its debt balance to ensure long-term value for its shareholders.
The company is still on the long road to recovery after reporting huge losses in the previous years. Intel is still considered a big name in the chip manufacturing game by revenue and makes more chips than any other company in the U.S.
Intel Reveals Cost Reduction Plan to Mitigate Loss
The company announced that it will reduce its operating expenses by cutting expenses and employees under its R&D and marketing departments. The cut is expected to save billions each year through 2026.
Intel emphasized that it will "stop non-essential work" and will review all ongoing projects and equipment to ensure that everything is accounted for.
CEO Pat Gelsinger admitted that despite the current AI hype, the chip company has yet to fully benefit from it. Intel recorded $12.8 billion in revenue for the previous quarter.
Despite the reduction in several aspects, Intel promised that it would retain its core investments through process technology and products.
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