Debasis Mohapatra
Bengaluru, 2 August 2024
Indian employees of global chip major Intel are worried lot owing to the company’s latest plan to cut around 15,000 jobs across the globe.
Though sources in the know said that most staffers in India are unlikely to be affected by the latest round of layoffs, there is certain amount of anxiety building up among employees here as the chip major has been reducing headcount in multiple rounds in order to save cost.
“Lay off announcements anywhere across the world by a company create pressure among staffers everywhere. Indian staffers of global technology giants have been facing the pressure since last years as these companies are reducing headcount for quite some time now,” said an HR source.
On Thursday, Intel Corp.’s CEO Pat Gelsinger said in a memo to staff that the company would reduce 15% of its huge workforce – about 15,000 jobs – in order to save costs. The company plans to save $10 billion by 2025 through these measures.
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low,” Gelsinger wrote in the memo published on Intel’s website. Intel will announce an ‘enhanced retirement offering’ for eligible employees and offer an application programme for voluntary departures.
Intel has around 1,10,000 employees across the world with around 13,000 staffers working from India. The chip major has its largest design and engineering centre in India outside the US.
Mounting cost pressure:
During the April-June quarter, Intel posted a loss of $1.6 billion as compared to a profit of $1.5 billion posted at the same period of last year. Its revenue dropped 1% to $12.8 billion from $12.9 billion. The losses were higher than what the market expected. This is the second consecutive quarter of loss for the company.
Unlike peers like Nvidia, Intel manufactures chips in addition to designing them. It is currently working to set up a chip foundry for manufacturing chips in the US. As the company faces rising cost pressure, these staff reduction steps are aimed at saving costs.
