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Intel Broadcasts Layoffs After Paying $1.5 Billion In Q1 Dividends

Intel Broadcasts Layoffs After Paying $1.5 Billion In Q1 Dividends

2023-05-08 10:40:24

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Chipmaker Intel Company has confirmed one other wave of layoffs after rumors prompt that the agency was lowering budgets for its knowledge heart and shopper computing enterprise divisions. Intel introduced widespread pay reductions earlier this yr that noticed senior executives and workers miss their bonuses and take wage reductions as a part of the agency’s efforts to cut back prices throughout a historic downturn within the semiconductor trade that has affected each chip designers and producers. Now, in an announcement despatched to Tom’s {Hardware}, the Santa Clara, California expertise large has shared that it’s present process “function-specific workforce reductions.”

Intel’s Layoffs Observe Rumors Speculating As A lot As 20% Workforce Reductions

Intel’s earnings report for the primary quarter of 2023 was one of many worst within the firm’s historical past. Its income dropped by 36% yearly and the agency additionally posted a loss per share of 4 cents. These losses got here because the agency ensured that its traders had been pleased and paid $1.5 billion in dividends out of pocket throughout Q1, retaining the funds almost much like the yr in the past quarter’s figures.

Rumors of layoffs at Intel surfaced final week when Dylan Patel of Semianalysis tweeted about it and shared:

Very unlucky information, however huge layoffs at Intel coming! Intel’s Datacenter and Shopper computing teams are receiving ~10% finances cuts It is as much as divisions to determine easy methods to minimize Given fastened prices, means as a lot as 20% layoffs in teams LTD (course of node) unaffected

Nonetheless, on the time, he was the one supply that had talked about the brand new enterprise technique, and so it was unclear whether or not the layoffs would truly happen. Now Intel itself has confirmed this, after being requested by Tom’s Hardware to touch upon the rumors. The layoffs are a part of the agency’s newest efforts to retake the chipmaking crown from the Taiwanese Taiwan Semiconductor Manufacturing Firm (TSMC) and construct extra vegetation in America.

Intel Earnings

Intel’s statement despatched to the publication reads as follows:

“Intel is working to speed up its technique whereas navigating a difficult macro-economic surroundings. We’re centered on figuring out price reductions and effectivity positive factors by means of a number of initiatives, together with some enterprise and function-specific workforce reductions in areas throughout the corporate.

“We proceed to spend money on areas core to our enterprise, together with our U.S.-based manufacturing operations, to make sure we’re well-positioned for long-term progress. These are tough selections, and we’re dedicated to treating impacted workers with dignity and respect.”

Toms Hardware

This information follows February’s pay cuts that noticed Intel droop advantage bonuses and cut back salaries by as much as 25%. The biggest share was reserved for the agency’s chief govt officer Mr. Patrick Gelsinger, and grades 7 to 11 noticed a 5% pay minimize – which was prolonged to 10% and 15% for  vice presidents and senior executives. On the similar time, quarterly and annual bonuses had been additionally suspended, and pension plan funds had been minimize in half.

Its troubles within the chip trade have hit Intel onerous, with the agency’s newest market capitalization sitting at $129 billion – decrease than its smaller rival Superior Micro Units, Inc. AMD is price $145 billion on the inventory market, and most analysts are hopeful that the agency will proceed to achieve knowledge heart market share this yr – a division that may see a workforce discount at Intel.

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