Intel, the world’s largest chipmaker, has unveiled a sweeping $10 billion cost savings plan that includes cutting over 15,000 jobs, representing approximately 15 percent of its global workforce. Meanwhile, the administration is set to give them $8.5 billion as part of the CHIPS Act, which is designed to create high-tech jobs.
The Verge said they are on a long, long road to recovery.
Intel will reduce its R&D and marketing spend by billions each year through 2026; it will reduce capital expenditures by more than 20 percent this year; it will restructure to “stop non-essential work,” and it’ll review “all active projects and equipment” to make sure it’s not spending too much.
CEO Pat Gelsinger told staff it is painful news for him to share. These are people with $100,000 plus salaries.
AS IT FAILS, THE ADMIN INVESTS MORE
The company just reported a loss of $1.6 billion for Q2 2024, substantially more than the $437 million it lost last quarter.
“Second quarter revenue was $12.8 billion, down just 1 percent year over year, and it’s not like all of Intel’s businesses are failing. Intel has been losing money on its chipmaking Foundry business as it invests in new factories and extreme ultraviolet (EUV) lithography. The company’s products themselves aren’t unprofitable. The Foundry is the problem,” writes Verge.
“From a tech leadership perspective, Intel’s not yet a big player in AI server chips like Nvidia, its relatively recent entry into graphics has yet to impress, and it had to overhaul its flagship laptop chips significantly to address the existential threat of Arm chips from the likes of Qualcomm and Apple, which can offer more battery life than Intel. Like competitors, the company now partially relies on TSMC, not just its own foundries, to help produce some of its most advanced chips,” Verge says.
However, the US government will keep investing our tax dollars. The government does not invest well.
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