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Intel to layoff more than 15% of workforce — almost 20,000 employees — suspends dividend
Posted on 8/1/24 at 4:15 pm
Posted on 8/1/24 at 4:15 pm
Article
Here are the most relevant bullet points from the company's press release:
Implementing comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.
Suspending dividend starting in the fourth quarter of 2024. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
Reducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
Reducing Capital Expenditures: With the end of its historic five-nodes-in-four-years journey firmly in sight, Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements. This will reduce gross capital expenditures* in 2024 by more than 20% from prior projections, bringing gross capital expenditures in 2024 to between $25 billion and $27 billion. Intel expects net capital spending* in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting gross capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
Reducing Cost of Sales: The company expects to generate $1 billion in savings in non-variable cost of sales in 2025. Product mix will continue to be a headwind next year, contributing to modest YoY improvements to 2025's gross margin.
Maintaining Core Investments to Execute Strategy: The company continues to advance its long-term innovation and path to leadership across process technology and products, and the increased efficiency from its actions is expected to further support its execution. In addition, Intel continues to sustain investments to build a resilient and sustainable semiconductor supply chain in the United States and around the world.
Intel is nearing the completion of its promised five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025. In July 2024, Intel released to foundry customers the 1.0 PDK for Intel 18A. The company’s first two Intel 18A products, Panther Lake for client — the first microprocessor to use RibbonFet, PowerVia and advanced packaging — and Clearwater Forest for servers, are on track to launch in 2025.
Simplifying Our Portfolio: We will complete actions this month to simplify our businesses. Each business unit is conducting a portfolio review and identifying underperforming products. We are also integrating key software assets into our business units so we accelerate our shift to systems-based solutions. And we will narrow our incubation focus on fewer, more impactful projects.
Here are the most relevant bullet points from the company's press release:
Implementing comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.
Suspending dividend starting in the fourth quarter of 2024. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
Reducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
Reducing Capital Expenditures: With the end of its historic five-nodes-in-four-years journey firmly in sight, Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements. This will reduce gross capital expenditures* in 2024 by more than 20% from prior projections, bringing gross capital expenditures in 2024 to between $25 billion and $27 billion. Intel expects net capital spending* in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting gross capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
Reducing Cost of Sales: The company expects to generate $1 billion in savings in non-variable cost of sales in 2025. Product mix will continue to be a headwind next year, contributing to modest YoY improvements to 2025's gross margin.
Maintaining Core Investments to Execute Strategy: The company continues to advance its long-term innovation and path to leadership across process technology and products, and the increased efficiency from its actions is expected to further support its execution. In addition, Intel continues to sustain investments to build a resilient and sustainable semiconductor supply chain in the United States and around the world.
Intel is nearing the completion of its promised five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025. In July 2024, Intel released to foundry customers the 1.0 PDK for Intel 18A. The company’s first two Intel 18A products, Panther Lake for client — the first microprocessor to use RibbonFet, PowerVia and advanced packaging — and Clearwater Forest for servers, are on track to launch in 2025.
Simplifying Our Portfolio: We will complete actions this month to simplify our businesses. Each business unit is conducting a portfolio review and identifying underperforming products. We are also integrating key software assets into our business units so we accelerate our shift to systems-based solutions. And we will narrow our incubation focus on fewer, more impactful projects.
1
Posted on 8/1/24 at 4:22 pm to LSUGent
Shocked this company is still around
Posted on 8/1/24 at 4:25 pm to Jjdoc
It shouldn't be that shocking, outside of AMD, they are the only chip maker producing x86 architecture chips for PCs.
That architecture is heading for extinction though, and Intel has rested on its laurels for about a decade now, while AMD is innovating and looking towards the future.
That architecture is heading for extinction though, and Intel has rested on its laurels for about a decade now, while AMD is innovating and looking towards the future.
Posted on 8/1/24 at 6:19 pm to LSUGent
quote:not to mention their latest flagship chips are plagued with issues
That architecture is heading for extinction though, and Intel has rested on its laurels for about a decade now, while AMD is innovating and looking towards the future.
ARM is the future baby
Posted on 8/1/24 at 6:29 pm to LSUGent
quote:
That architecture is heading for extinction though
We have heard this one a long time... Care to put a date to it?
INTC definitely taking some pain here. They bet big on their foundry business and we will see in the fall if it starts to pay off as they have jumped 5 process nodes in 4 years. Right now it does not look promising unless they get some more larger customers signed up.
The "dead" x86 business will keep them around and they are in no situation to go bankrupt anytime soon.
But despite my recent bullish outlook, this looks like dead money. Until they get more customers on their foundry business they are going to suffer. However it took so long to get to this point, they may even miss the AI boom. As firms will struggle to monetize AI in any way and will probably curtail spending before Intel can really find a footing.
Posted on 8/1/24 at 6:40 pm to wileyjones
quote:
not to mention their latest flagship chips are plagued with issues
"Issues" is an understatement. They're a complete disaster.
Posted on 8/1/24 at 10:02 pm to UltimaParadox
quote:
We have heard this one a long time... Care to put a date to it?
I think it’ll happen sooner than everyone thinks. Don’t think I could not put a date on it, but we are already starting to see it put into motion. Qualcomm is already making ARM chips for Windows laptops to compete with Mac
LINK
The biggest issue holding back a transition for mass ARM adoption is that so many current windows applications, systems, and games are written for the x86 architecture. This could be resolved in the next iteration or two of Windows with a translation layer, which is what I believe what Apple did.
Posted on 8/2/24 at 7:45 am to LSUGent
quote:
I think it’ll happen sooner than everyone thinks. Don’t think I could not put a date on it,
I mean it will eventually happen, but soon implies like next 5 years.
quote:
Qualcomm is already making ARM chips for Windows laptops to compete with Mac
Microsoft literally built Windows RT that will run on ARM and it has existed since 2013. It is not widely used.
Wiki on Win RT
quote:
mass ARM adoption is that so many current windows applications, systems, and games are written for the x86 architecture
That is very true, including the very development tools that develop bascially everything for ARM.
quote:
This could be resolved in the next iteration or two of Windows with a translation layer, which is what I believe what Apple did.
Has existed a long time, Macs ran on x86 hardware for almost 20 years, up until about 2021.
Once again, eventually something will replace x86 as the mainstream platform. But we are talking something must come along and be so much better that we have no choice. But even then it will take multiple decades to get platforms and companies to make the transition.
Hey maybe RISC-V will be finally fast enough to take market share from both ARM and Intel/AMD. As it is open source and won't have those massive royalty fees. I know Nvidia is talking about replacing ARM on their graphics card with them in the near future
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