Intel is due to report its third-quarter financial results later this month, and the event will be preceded by a painful decision for the company to cut staff, according to knowledgeable sources.The number could run into thousands of layoffs, with some divisions losing up to 20 percent of their jobs.Source image: IntelInformation about the impending downsizing at Intel was released this week by Bloomberg, but concerns about its inevitability have previously been expressed by anonymous company employees on social media pages.As of the end of July, Intel had 113,700 employees, as many semiconductor companies had stopped hiring this summer, and at the previous quarterly conference, the CFO said Intel would be forced to cut costs in the third quarter of this year.By some estimates, Intel units will lose one in five employees in some cases, but that is more true for professionals in sales and marketing.Analysts at Gartner and IDC reported this week that PC and laptop sales were down 15% or 20% in the third quarter compared to the same period last year.Intel still depends about half of its revenue on the PC segment, so current market trends are undermining the company's financial performance.According to Intel's own forecasts, its year-end revenue could decline by $11 billion from expectations.Third-party analysts believe Intel's third-quarter revenue will fall about 15%.Intel's profit margin is also approaching 45% versus its historical 60%.In such circumstances, it is necessary to take measures to reduce costs, and laying off some staff is the traditional way to achieve it.Intel's fixed costs could reach $25 or $30 billion, according to some experts, and staff cuts would reduce that amount by an amount of 10 to 15%.Intel's previous major downsizing took place in 2016, when about 11 percent or 12,000 employees lost their jobs.Intel's stock price has fallen more than 50 percent this year, and it lost 20 percent in the last month alone.Management needs to show resolve in the fight to cut costs in order to gain investor confidence.Dividend payments are also in question, but the public offering of its Mobileye subsidiary should provide Intel with an influx of capital, which is good news amid such a gloomy trend.
Micron, Intel and NVIDIA are not going to reduce the number of personnel in the near future
Micron Technology had to deal with contradictory statements in the past days.On the one hand, it expressed its willingness to invest $40 billion to expand its memory production in the U.S.On the other hand, it had to admit that demand for memory failed to meet expectations last quarter, proportionally reducing revenues.Hire new employees in such circumstances Micron will not be able to, but will not cut staff, and it will be joined by Intel and NVIDIA.Image source: Micron TechnologyAt least, that's what Bloomberg representatives report, citing the companies' proprietary information.In fact, Micron Technology will not suspend hiring even in this difficult situation, but will significantly limit its scope.Micron executives aren't thinking about cuts commensurate with the level of trouble in the economy, either, as Bloomberg explains, citing its own sources.At a general staff meeting at Intel last week, management assured the team that it won't be cutting staff, as Bloomberg adds.NVIDIA made similar statements this week, already after admitting to a slump in revenue.In fact, company founder Jensen Huang even promised to raise employee pay to counter inflation.NVIDIA's management is confident in the market opportunities open to the company and the technology it is developing.Analysts at Citigroup, however, do not share the optimism of these market participants, who are convinced that the correction in demand is temporary in nature.According to experts, the semiconductor components market is entering its worst crisis since 2001, and the downturn will be observed in all market segments.
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