Intel slashes costs and jobs in massive shakeup, saving billions!

Today marks a significant moment in Intel’s history as we gather for the All Company Meeting to address some challenging news. Following our earnings call, we are announcing a series of actions aimed at reducing costs and reshaping our company’s future.

Key Points of Discussion:

1. Cost Savings Initiative: We have set a target to achieve $10 billion in cost savings by 2025, part of which involves reducing our headcount by approximately 15,000 roles, constituting 15% of our current workforce. These changes are expected to be implemented by the end of this year.
2. The Why: It is imperative to align our cost structure with our evolving operating model and revolutionize our operational strategies to adapt to the current market dynamics. Despite a surge in revenues, we are yet to capitalize on trends like AI due to high costs and low margins. Bold actions are required to tackle these challenges, especially in light of our financial projections for the second half of 2024.
3. Next Steps: In the upcoming week, we will introduce an enhanced retirement offering for eligible employees across the company and invite voluntary departures through an application program. Upholding our core values of transparency and respect, we pledge to navigate this transformation with integrity and compassion.

The Why Behind the Changes:

• Reassessment of Operational Model: A thorough evaluation of our business’s efficiency highlighted the need to realign our cost structure to remain competitive in the industry. Despite a substantial increase in revenue, our workforce has grown disproportionally, necessitating corrective measures to ensure long-term sustainability.
• Operational Streamlining: Feedback from employees emphasized the need to simplify processes, reduce complexity, and enhance decision-making efficacy. Automation, bureaucracy elimination, and workflow optimization emerged as crucial areas for operational enhancement.

Priorities Moving Forward:

• Operational Efficiency: Intensified focus on cost efficiencies company-wide, alongside strategic headcount reductions.
• Product Portfolio Optimization: Streamlining business units, identifying underperforming products, and aligning software assets to fortify systems-based solutions.
• Simplified Operations: Reworking organizational structures, fostering a culture of ownership and accountability, and consolidating functions for improved efficiency.
• Capital and Cost Management: Realigning financial resources for capital efficiency and cost savings, including a reduction in capital expenditures and non-variable costs.
• Dividend Suspension: Temporarily suspending stock dividends to prioritize business reinvestments and sustainable profitability.
• Growth Investments: Upholding our IDM 2.0 strategy by fueling core product innovations and technological advancements.

In this transformative phase, we acknowledge the challenges ahead but remain committed to building a financially robust and agile Intel. Through strategic decisions and collective efforts, we are laying the foundation for a prosperous future dedicated to innovation and global impact. The journey ahead may be arduous, but the vision of technological advancement and world-changing capabilities propels us forward. Join us in this pivotal moment as we shape a tomorrow defined by excellence and progress.