Intel laid off an unspecified number of employees in its sales and marketing departments and confirmed these findings to CRN. Intel declined to provide further details, but a representative confirmed that the layoffs are part of a reorganization process that involves a new operating model.
Although it did not provide specific layout numbers, the company was required to disclose that the layoffs affected more than 50 people in a month under WARN Act requirements. In October, Intel CEO Pat Gelsinger announced plans to cut spending by $10 billion by 2025.
Regarding the recent job cuts, the company said operating losses will peak in 2024, when the four-year, five-node plan is completed.
“In order to continue executing our company's strategy and driving customer outcomes, Intel's Sales and Marketing group announced changes to its organizational structure,” an Intel representative said. “We are confident in Intel's future and are committed to supporting all of our employees through this process, including treating affected employees with dignity and respect. ”
What does Intel hope to achieve going forward?
The previous reporting model was split into manufacturing and technology development. The new foundry operating model splits the business into Intel Foundry and Intel Products, with overall gross profits and margins divided according to the services and products represented by both divisions. With this new financial reporting structure, Intel revealed last year that its product design division suffered a $7 billion operating loss.
The transition to a new operating model will enable Intel Foundry to increase profitability and increase unrealized value by $100 billion. It also enables efficiency and cost savings, which benefits foundries and their products.
Intel Foundry will now operate as an independent chip marketing business, competing with other major companies such as TSMC and Samsung. Intel already intends to make chips for Nvidia. Earlier this year, Nvidia selected Intel for his GPU packaging business, which can produce over 300,000 of his H100 GPUs per month.
In its foundry business, Intel is targeting a gross profit margin of 40% and an operating profit margin of 30% by the end of 2030.
