Intel launches largest 'streamlining plan'; layoffs include 'Israel'

By Al Mayadeen English
Source: Globes + Al Mayadeen English
4 Aug 2024 20:57

Intel, the semiconductor giant, will lay off over 17,000 employees worldwide, including in "Israel", as part of a major cost-cutting initiative.

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The symbol for Intel appears on a screen at the Nasdaq MarketSite, on October 1, 2019, in New York. (AP)

Intel, the semiconductor giant, is launching its largest-ever "streamlining plan", which will see over 17,000 employees laid off globally, including in "Israel", according to sources that spoke to Globes.

This cut represents 15% of its total workforce. Starting tomorrow (Monday), Intel will release details about a voluntary retirement program known as the Corporate People Movement (CPM). This initiative is aimed at employees nearing retirement age or those with lower performance ratings, offering them a one-time buyout payment and enhanced pension incentives.

The layoff process will commence following the voluntary retirement phase, with all affected employees informed by early October. Intel plans to complete this process by November 15. The company intends to cut annual costs by $10 billion in response to decreasing revenue, market share, and a valuation that recently fell below $100 billion for the first time in decades.

Intel has 124,800 employees worldwide, including about 11,000 in "Israel" across Haifa, al-Quds, Petah Tikva, and Kiryat Gat. The company recently halted work on its new $25 billion factory in Kiryat Gat due to cash flow problems and the need to secure customers for the facility.

In turn, Intel CEO Pat Gelsinger expressed his regret over the decision, acknowledging its significant impact on employees and their families.

Wall Street stocks drop as Intel announces major layoffs

Wall Street opened sharply lower Friday morning following disappointing US jobs data, with all three major US equity indices falling over 1%. This drop was compounded by Intel's announcement of substantial job cuts, which sent the tech giant's shares tumbling more than 25%.

Intel's stock plummeted 27.7% within seven minutes of trading after the company revealed its plan to lay off over 10,000 employees and cut $10 billion in costs. The move is said to be part of Intel's strategy to manage declining profits and macroeconomic challenges, as detailed in a memo circulated to staffers on Thursday.

"This is painful news for me to share. I know it will be even more difficult for you to read," Intel CEO Pat Gelsinger wrote to employees.

The decision comes in response to a significant drop in revenue across various divisions, with the company's third-quarter revenue falling 20% year-over-year to $15.3 billion and net income plummeting 85% to $1 billion.

"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," said Gelsinger. "Our revenues have not grown as expected — and we've yet to fully benefit from powerful trends, like AI," he added.

Intel had previously announced a major round of layoffs in October 2022 and planned to cut between $8 billion and $10 billion in costs annually through 2025.

Despite this, the company's headcount only dipped by about 5% in 2023, from 131,900 to 124,800 employees. By March 30, 2024, Intel had rehired many positions, bringing its employee count back up to 130,700.

The new layoffs, separate from a 4% headcount reduction between March and June 2024, are expected to be completed by the end of 2024.