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Business

Time: 2024-07-31

Intel's Cost Reduction Strategy and Market Challenges

Intel's Cost Reduction Strategy and Market Challenges
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Intel to Cut Thousands of Jobs for Cost Reduction

Intel Corp. is planning to eliminate thousands of jobs in an effort to reduce costs and finance a strategy to bounce back from a decline in earnings and market share . The workforce reduction is expected to be announced soon , with Intel currently having around 110,000 employees , excluding those at spun - out units . Chief Executive Officer Pat Gelsinger is investing heavily in research and development to enhance Intel 's technology and regain its position in the semiconductor industry , which has been challenged by competitors like Advanced Micro Devices Inc. Intel 's shares saw a 1 % increase in late trading on the news.

Challenges Faced by Intel in Semiconductor Industry

Intel has been facing challenges in the semiconductor industry , with other chipmakers like Nvidia Corp. making significant advancements in developing semiconductors for artificial intelligence - related tasks . The company is also dealing with fluctuating demand for chips used in laptops and desktop computers , its primary business area . Gelsinger is optimistic about Intel 's ability to enhance its technology and has initiated a plan to construct factories for manufacturing semiconductors for other chipmakers . The company previously reduced its workforce by 5 % in 2023 and expects cost reductions to save up to 0 billion by 2025.

Financial Projections and Expectations for Intel

Analysts predict that Intel 's second - quarter revenue will remain flat compared to the previous year , with a modest growth anticipated in the second half of 2024 . Total sales are expected to increase by 3 % to 5.7 billion for the full year , marking the first annual revenue growth since 2021 . The company is set to report its second - quarter earnings soon , and the announcement of job cuts is part of its strategy to navigate the challenging landscape of the semiconductor industry.

In conclusion , Intel 's decision to reduce its workforce is a significant move in its efforts to cut costs and drive growth in the face of market challenges . The company 's focus on research and development , along with strategic investments in technology , aims to position Intel as a competitive player in the semiconductor market.

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