Intel Corp. is gearing up to make significant changes in order to bounce back from recent market challenges. The company plans to streamline its workforce by cutting thousands of jobs to reduce costs and fuel its efforts to regain lost market share and recover from an earnings slump.
Chief Executive Officer Pat Gelsinger is leading the charge by focusing on research and development to enhance Intel’s technology and position it as a leader in the semiconductor industry once again. This move comes as competitors like Advanced Micro Devices Inc. have made significant gains, closing the gap on Intel’s once-dominant position.
Additionally, Intel is facing competition from chipmakers like Nvidia Corp., who have taken the lead in developing high-performance semiconductors tailored for demanding artificial intelligence-related tasks. Intel is also addressing fluctuations in demand for chips used in laptops and desktop computers, which are core components of its business.
Gelsinger’s strategy includes investing in building factories to manufacture semiconductors not just for Intel’s own use, but also for other chipmakers. Hiring Naga Chandrasekaran from Micron Technology Inc. as the chief global operations officer underscores Intel’s commitment to strengthening its manufacturing capabilities.
In 2023, Intel reduced its workforce by approximately 5%, reaching 124,800 employees by year-end. This move, along with other cost-cutting measures, is expected to save the company up to $10 billion by 2025. Analysts predict that Intel’s second-quarter revenue will remain flat compared to the previous year, with modest growth anticipated in the second half of 2024.
Overall, Wall Street estimates indicate that Intel’s total sales will increase by 3% to reach $55.7 billion for the full year, marking the first annual revenue increase since 2021. Investors have reacted positively to these developments, with Intel’s shares rising by 1.8% in New York on Wednesday.
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