Intel Set to Announce Layoffs of Over 21,000 Employees Representing 20% of Workforce

This publication does not constitute investment advice. The author holds no positions in any of the stocks discussed herein.

Intel’s Strategic Restructuring Under New Leadership

C. J.Muse, a prominent analyst at Cantor Fitzgerald, recently highlighted a forthcoming shift in Intel’s operational strategy, particularly emphasizing “aggressive cost-cutting”as the company adapts to the leadership of Lip-Bu Tan. This transition marks a pivotal moment for the renowned chipmaker, suggesting that significant changes are on the horizon.

Planned Workforce Reductions

According to a report from Bloomberg, Intel is poised to announce a reduction of its workforce by 20 percent later this week. At the end of 2024, the company employed approximately 108, 900 staff members. If these plans materialize, over 21, 000 employees may be impacted.

Upcoming Earnings Announcement

This news arrives just as Intel prepares to release its earnings for the first quarter of 2025, an event that will be the first under Tan’s leadership. This earnings report could offer insights into the company’s immediate future amidst ongoing restructuring efforts.

A History of Workforce Changes

This is not the first instance of Intel facing scrutiny regarding workforce reductions. In July 2024, another Bloomberg report indicated plans to lay off 10, 000 employees. Nevertheless, the total headcount has remained around 110, 000 in the subsequent months.

Continuity or Change?

Intel’s previous CEO, Pat Gelsinger, initiated an ambitious cost-cutting strategy aimed at saving $10 billion. It remains ambiguous whether the anticipated 20 percent workforce reduction aligns with Gelsinger’s plan or if it represents a new direction under Lip-Bu Tan.

Market Reactions and Future Considerations

If the announced layoffs come to fruition, it could act as a bullish indicator for analysts at Cantor Fitzgerald. They are also optimistic about the upcoming Intel Foundry Day scheduled for April 29, where any announcements concerning potential joint ventures will be closely watched.

Currently, Intel shares have shown a 2 percent increase in after-hours trading, following a nearly 4 percent rise during the regular session. Notably, the company’s stock performance has stabilized this year after significant declines in March and early April.

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