Intel plans to shed thousands of workers
Intel, formerly the most precious American flea manufacturer, faces a difficult battle while trying to remain relevant in the artificial intelligence race.
Friday, Intel saw its stock drop by 9%, one day after the company based in Santa Clara said that it could take a break or interrupt its next flea manufacturing process technology known as 14A if it could not win a “significant” customer.
“We continue to see a lack of growth in significant income for coming, because Intel does not have the products to participate in AI,” wrote Tristan Gerra, main research analyst at Baird Equity Research, in a note.
The company’s actions dive also occurs while the semiconductor company, which said quarterly profits on Thursday, dismisses thousands of workers and reduction expenses.
Intel plans to end the year with 75,000 “basic” employees, who exclude those working for the subsidiaries. It was down compared to the 99,500 “basic” employees that Intel had at the end of 2024.
The growing popularity of AI chatbots such as the Openai Chatppt which can generate text and images has triggered fierce competition between some of the largest technological companies in the world, including Google and Meta.
Some flea manufacturers like Nvidia have benefited from this race because its high -end tokens are considered to be the backbone of AI.
Nvidia has grown quickly, driving the AI boom to become the first listed company to reach a market assessment of $ 4.
Founded in 1968 at the start of the PC revolution, Intel continued to late after the iPhone released in 2007 in 2007.
The co -founder and chief executive officer of the late Apple, Steve Jobs, has once criticized Intel as “really slow” and “not very flexible”, according to the biography of Walter Isaacson’s jobs.
In 2020, Apple began to feed its laptops with its own chips, in transition from Intel processors. That year, Nvidia exceeded Intel as the most precious American flea manufacturer. Intel market capitalization on Thursday was $ 98.71 billion from the market.
While AI has strengthened the demand for more powerful and effective semiconductors, only a handful of companies have collected the awards, according to a analysis by McKinsey & Company, a consulting company. In 2024, the highest 5% of companies – led by NVIDIA – generated almost all the economic profit of the semiconductor industry.
“A small part of the industry is to set up the boom in value creation and generate economic benefits at unprecedented levels. But most of the industry is faced with a very different reality,” said the analysis.
Lip-Bu Tan, who became Director General of Intel in March, traced the way to the way for the manufacturer of flea in difficulty. Like other technology business leaders across California, he also tries to slow down costs in dismissing workers and reducing expenses.
“I know that the last months have not been easy,” he wrote in a note to employees on Thursday. “We make difficult decisions but necessary to rationalize the organization, stimulate greater efficiency and increase responsibility at all levels of the company.”
Among its cost reduction plan: the abolition of projects previously planned in Germany and Poland and in motion assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia. Intel said he was determined to invest in the United States, but will slow down the construction of Ohio in part to “ensure that our expenses are aligned on demand”.
Intel also focuses on its “basic product portfolio” and its AI offers to better serve customers.
“There are no more virgin checks,” wrote Tan. “Each investment must have an economic meaning.”
The net loss of Intel for the second quarter expanded to 2.9 billion dollars, or 67 cents per share, against $ 1.6 billion, or 38 cents per share, a year earlier.
Income was stable at 12.9 billion dollars. Analysts, on average, awaited an adjusted profit of 1 hundred per turnover of $ 12 billion, according to a FostSet survey.
The writer of the Associated Press, Barbara Ortatay, contributed to this report.
