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Intel Freezes PC Chip Division Hiring For At Least Two Weeks, Cites ‘Macroeconomic’ Uncertainty: Report
‘Increased focus and prioritization in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders and employees,’ Intel said in a statement.
After a rocky start to 2022 that included the war in Ukraine , COVID lockdowns in China and global inflation, Intel is hitting the pause button on new hires for its client computing group responsible for PC desktop and laptop chips for at least two weeks, according to a report from Reuters.
The internal memo sent to employees Wednesday said Intel is “pausing all hiring and placing all job requisitions on hold” in the division. According to the memo, some hiring may resume in as little as two weeks as the client compute group evaluates priorities. All current job offers will be honored, the memo stated.
“We believe we are at the beginning of a long-term growth cycle across the semiconductor industry, and we have the right strategy in place,” an Intel spokesperson said in a statement to CRN’s request for comment. “Increased focus and prioritization in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders, and employees.”
Intel’s shares have slipped more than 27 percent over the past year and CEO Pat Gelsinger in February told investors to expect lower margins as the company lays out billions of dollars to build manufacturing hubs in the U.S. and Europe. Client computing is Intel’s largest revenue-producing group, generating $9.3 billion of the company’s $18.4 billion in revenue in its most recent quarter. In the PC space, Intel is facing stiff competition from AMD and Apple. Meanwhile, major PC makers have all pointed to a softening of consumer shipments over the next quarters even though they posted impressive results for their most recent earnings, including HP Inc., Lenovo and Dell.
Intel’s footprint is still massive, with 121,000 global employees. In a memo from Tuesday, Gelsinger said the company would “slow” hiring and 23,000 recently hired employees would continue the on-boarding process over the next 90 days.
PC Shipments Slowing In 2022
The hiring freeze comes on the heels of an IDC report showing PC shipments slowing in 2022. The research cites headwinds from continued COVID lockdowns, the war in Ukraine and inflation for an expected 8.2 percent drop year over year in 2022. But IDC also noted that PC shipments are expected to remain well above pre-pandemic levels with strong commercial demand for device refreshes and emerging markets driving continued demand.
Harry Zarek, president of Ontario-based solution provider Compugen, said the move by Intel is prudent and he’s not concerned about the health of the overall market. “I think it is inevitable there will be an economic slowdown as the impact of inflation and rising interest rates will cool down spending,” he said. “We live in a world where abrupt and unexpected changes are happening with increasing frequency. We need to be agile and be willing to make changes very quickly. On that basis, kudos to Intel for reacting so quickly.”
Zarek said the IDC report showing slowing PC shipments is no reason to panic, either. “[A slowdown] is to be expected after the avalanche of orders in 2021,” he said. “The key data insight is that we have increased overall market demand as compared to pre-COVID … that is consistent with what we are seeing in our market. It gives us confidence in continuing to invest in growing our business in the device space.”