Intel Cuts Jobs and Capex Amid Disappointing Results

Intel, a leading semiconductor company, has revealed plans to cut 15,000 jobs and reduce its capital expenditure in response to the challenges posed by the current economic downturn. The company is taking decisive actions to resize and refocus its operations after facing disappointing results in the second quarter.

The reduction in spending includes a significant headcount reduction of more than 15%, signaling a shift towards capital efficiency and aligning investment levels with market requirements. Intel acknowledges that the industry conditions have been softer than anticipated, prompting the need for strategic adjustments.

As part of its cost-cutting measures, Intel plans to slash its gross capital expenditure by over 20% in 2024, amounting to a reduction of $10 billion from previous projections. The company aims to bring down the capex figures to between $25 billion and $27 billion for 2024, with further reductions expected in 2025 and 2026.

The semiconductor giant has also made significant technological advancements, with the introduction of the 18A process technology powering up devices like the Panther Lake and Clearwater Forest processors. Intel is gearing up to launch the 18A parts next year, positioning itself to compete with industry players like TSMC in the advanced process technology space.

Despite facing challenges in the second quarter, Intel remains optimistic about its future prospects. The company's CEO, Pat Gelsinger, emphasized the importance of the upcoming Intel 18A launch in regaining process technology leadership and strengthening its market position. By implementing operational changes and focusing on innovation, Intel aims to enhance profitability and deliver value to its shareholders.