Key points:
- Intel is reportedly planning to cut thousands of jobs
- The cuts are said to be due to a demand slowdown
- Intel shares are down 51% in 2022
Intel (NASDAQ: INTC) is preparing a significant decrease in its personnel to reduce costs and deal with a slowing PC market, according to a Bloomberg article citing people with knowledge of the situation.
The chipmaker may announce the layoffs as early as this month, around the same time as its third-quarter earnings on October 27.
According to Bloomberg sources, the companywide cuts are expected to hit the sales and marketing group, with some divisions seeing cuts of around 20% of staff.
The company had 113,700 employees as of July.
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Intel has been impacted by a fall in PC demand and prices stagnating as the broader economic environment faces challenges. Consumer demand for PCs surged during the pandemic as lockdown restrictions pushed people online. However, the macroeconomic environment has slowed consumer spending, with inflation soaring and interest rates rising.
In addition, Intel's PC processors are its primary business, and it has lost market share to rivals such as Advanced Micro Devices. The company warned in July that 2022 sales would be lower than previously expected.
One of Bloomberg's analysts said the potential job cuts are expected to lower Intel's fixed expenses by 10% to 15%.
Intel has tumbled 51% this year, while in the last month, it has declined almost 20%.
Elsewhere, Intel's price target was lowered to $30 from $35 at Barclays on Wednesday. Analyst Blayne Curtis kept an Underweight rating on Intel shares, noting volumes were slightly worse, but the outlook for Q4 “moves much lower.”