Intel Announces Layoffs and Q2 2024 Earnings Report
Chip giant Intel is planning to lay off thousands of employees to cut costs and allocate more resources for R&D efforts. 
The workforce currently stands at 110,000, and Intel plans to lay off up to 10,000 employees as part of a cost-cutting policy valued at $10 billion by 2025.
Team Blue, as Intel is also known, reported negative results in its Q2 2024 earnings, missing revenue expectations. The company generated $2.3 billion in cash from operations, but its non-GAAP gross margin was down. Intel announced GAAP net income lower than expected and missed EPS estimates.
Intel CEO Pat Gelsinger confirmed plans to reduce the workforce by more than 15% by the end of 2024, amounting to around 15,000 job cuts. This aligns with a cost-saving plan of $10 billion by 2025, aiming to address financial challenges and realign operations.
Intel’s Q2 2024 Earnings Highlights:
- Intel reported $12.833 billion in non-GAAP revenue for Q2 2024.
- Data Center and AI (DCAI) and Client Computing Group (CCG) revenue missed expectations.
- The company’s Q2 2024 non-GAAP gross margin was 38.7%, down from previous guidance.
- Intel’s Q2 2024 net income and EPS fell short of consensus expectations.
Guidance for Q3 2024:
- Investors’ response to the earnings release caused a stock drop of over 10% in after-hours trading.
- Intel’s Foundry unit expects cost savings and improved margins by 2030.
Intel’s Workforce Reduction and Industry Trends:
Intel plans to align its cost structure with a new operating model and aims to benefit from emerging technologies like AI. Layoffs also follow previous post-pandemic reductions to improve financial performance.
Intel is part of a broader trend in the technology sector, as various companies have announced layoffs to adapt to market challenges. Unity, Discord, Microsoft, and Google are among those implementing workforce reductions.