According to a report on Bloomberg UK Intel is getting ready to reduce its headcount as a means to reduce costs amid declining sales of PCs. The news comes from "people with knowledge of the situation" so be cautious until it can be verified. The speculated layoffs could affect thousands of people across multiple divisions, according to Bloomberg's unknown source. The company is expected to announce its decision late this month.
In recent years, Intel has been hiring personnel as it tried to change the fortunes of its key business units and entered new businesses. But apparently the company needs to finally reduce its headcount of 121,000 by approximately 11% (12,000) now that PC sales are declining and the company's data center business is likely to follow suit, according to Bloomberg.
Intel still has to finalize how many people it plans to layoff, but numbers are expected to be in thousands, Bloomberg reports. Some of Intel's divisions, such as sales and marketing group, could see cuts as significant as 20%, others could be luckier.
Intel heavily depends on PC sales. Last quarter Intel's Client Computing Group responsible for PCs commanded about 50% of the company's revenue, so if Intel is bracing for a long decline of PC shipments, then management needs to react, which is why it is said to be cutting down its workforce.
Back in July the company reported its first loss in decades and said its 2022 revenue would be up to $11 billion lower than expected. As it turns out, declines of PC sales were steeper than expected and probably the delay of the company's 4th Generation Xeon Scalable 'Sapphire Rapids' data center platform played its role, so Intel needs to adjust its costs beyond reduction of CapEx.
What remains to be seen is whether Intel's layoffs will affect any of the company's ongoing projects, such as development of discrete graphics processors for PCs that are hardly competitive against higher-end GPUs by AMD and Nvidia.