Intel has announced significant cost-cutting measures following its second-quarter 2024 earnings report. The company aims to achieve $10 billion in cost savings in 2025, which includes reducing its workforce by roughly 15,000 roles, or 15% of its total head count. Most of these workforce reductions will be completed by the end of the year.
Intel has been struggling to take advantage of the AI boom in chip demands, with most AI chips and GPUs being provided by Nvidia.
Intel cites the need to align its cost structure with a new operating model and address lower-than-expected revenue growth. The company plans to introduce a companywide enhanced retirement offering for eligible employees and a voluntary departure application program.
Key priorities for Intel include reducing operational costs, simplifying its portfolio, eliminating complexity, and reducing capital and other costs. The company also plans to suspend its stock dividend beginning next quarter to prioritize investments for sustained profitability.
Despite these changes, Intel remains committed to its IDM2.0 strategy, focusing on process technology leadership, expanding manufacturing capacity in the U.S. and EU, becoming a leading-edge foundry, rebuilding product portfolio leadership, and delivering AI solutions.
For more information, view the announcement from Intel here.
