Intel’s Workforce To Shrink By Nearly A Quarter By Year’s End

The semiconductor giant made the disclosure in its second-quarter earnings report, where it says it is laying off roughly 15 percent of its workforce as part of a previously announced plan to ‘create a faster-moving, flatter and more agile organization.’

Intel said Thursday that it “plans to end the year with a core workforce of about 75,000 employees” due to layoffs and attrition, which would amount to nearly a quarter of its workers leaving in a matter of 12 months.

The Santa Clara, Calif.-based company made the disclosure in its second-quarter earnings report, where it said it is laying off roughly 15 percent of its workforce as part of a previously announced plan to “create a faster-moving, flatter and more agile organization.”

Intel had 108,900 employees as of last December, according to an annual report the company filed with the U.S. Securities and Exchange Commission earlier this year. With 99,500 employees accounting for Intel’s core workforce at the end of last year, this reduction would amount to a 24.6 percent decrease.

In the second-quarter earnings, Intel reported revenue of $12.9 billion, slightly higher than the previous quarter and the high end of Intel’s forecast for the period.

“Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency,” Intel CEO Lip-Bu Tan said in a statement.

Intel had expected second-quarter revenue of $11.2 billion to $12.4 billion, which its CFO, David Zinsner, called a “wider-than-normal” range that he said was the result of “very fluid trade policies“ set by the United States and other countries.

“We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers,” Tan said. “We are also taking the actions needed to build a more financially disciplined foundry. It’s going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value.”

The earnings were announced after Intel began notifying the states of Oregon, California, Arizona and New Mexico of its plan to lay off thousands of employees earlier this month.

When Tan revealed in April that his plan to “drive improved execution and operational efficiency” for the company would result in job cuts, the company declined to say how many employees would be impacted until now. Bloomberg reported days before Tan’s announcement that the layoffs would amount to 20 percent.

“We need to right-size and scale back the company while ensuring that we are retaining our best internal talents and hiring the best external talents from industry and universities,” Tan said on Intel's second-quarter earnings call.

“These were hard but necessary decisions, and we reduced management layers by approximately 50 percent in the process,” he added.

The expected workforce reduction is coming after Intel cut its workforce by 15 percent last year between layoffs, buyouts and early retirement packages. These job cuts happened under its previous CEO, Pat Gelsinger, in response to worsening financial conditions.

Editor’s note: CRN has adjusted the content of this story to clarify the nuances of how Intel classifies its workforce.