Intel employees face excruciating wait on layoff notice as CEO Gelsinger sets mid-October deadline
Intel employees face excruciating wait on layoff notice as CEO Gelsinger sets mid-October deadline
Gelsinger stated that the company is more than halfway to its workforce reduction target of approximately 15,000 employees by the end of the year.
Intel is continuing its cutback plans as it aims to complete laying off approximately 15,000 employees by the end of the year. While managers across Intel’s different divisions have in many cases already transferred to their superiors the names of those they recommend to let go, according to CEO Pat Gelsinger, they won’t receive the final notice until the middle of October.
"Through our voluntary early retirement and separation offerings, we are more than halfway to our workforce reduction target of approximately 15,000 by the end of the year," Gelsinger wrote in his message to employees posted earlier this week. "We still have difficult decisions to make and will notify impacted employees in the middle of October."
The first phase of the cutbacks came in August when the company announced a $10 billion cost-cutting plan, which included laying off 15,000 employees—15% of its workforce—and more targeted measures like canceling leasing programs and reducing employee benefits. The second phase came earlier this week with the announcement that the foundry division—Intel's business of manufacturing chips for other companies—will become an independent subsidiary within Intel with its own board of directors. Gelsinger explained that the foundry division, which includes the manufacturing plant in Israel, will have the opportunity to "evaluate independent sources of funding."
In addition, Gelsinger revealed that the company is “implementing plans to reduce or exit about two-thirds of our real estate globally by the end of the year.”
Intel will also pause its manufacturing operations in Poland and Germany "for approximately two years based on anticipated market demand," Gelsinger said. The chipmaker plans to scale back its plans for a factory in Malaysia. U.S. manufacturing projects will not be affected, according to the company.
Gelsinger also made sure to provide some good news, announcing a partnership with Amazon's AWS cloud division to develop chips for its artificial intelligence business, as well as securing a $3 billion contract with the U.S. government under the CHIPS Act.
"As we continue acting with urgency to execute the plan we announced last month, we are also working to carefully manage our cash as we meaningfully improve our balance sheet and liquidity. This includes through selling part of our stake in Altera—which is something we have talked about publicly several times and has long been part of our strategy to generate proceeds for Intel on Altera’s path to an IPO.
"All eyes will remain on us. We need to fight for every inch and execute better than ever before. Because that’s the only way to quiet our critics and deliver the results we know we’re capable of achieving," added Gelsinger.
