Chipmaker Intel Corp is planning major job cuts, likely numbering in the thousands, in the face of a slowing PC market, Bloomberg News reported on Tuesday, citing people familiar with the situation. The layoffs will be announced as early as this month and some of Intel’s divisions, including the sales and marketing group, could experience layoffs affecting about 20% of staff, according to the report.
The company had 113,700 employees as of July, Bloomberg News reported. Intel declined to comment on the job cuts. In July, the company lowered its annual forecasts for sales and profit, after estimates for the results of the second quarter did not come true.
High inflation and the reopening of offices and schools have led people to spend less on computers than they did during the pandemic-related lockdowns. Chipmakers are also under pressure from Covid-19 restrictions in the key PC market of China and the conflict in Ukraine, which have disrupted supply chains and also affected demand.
Intel Chief Executive Pat Gelsinger released a memo to company employees on Tuesday outlining plans to create an internal foundry model for the company’s external customers and product lines.
The semiconductor business makes chips that other companies design, and Taiwan Semiconductor Manufacturing Co is the top player in that space. Intel has mostly built chips that it designed itself until now.