The company has announced plans to cut thousands of jobs as part of a strategy to recover financially and address its shrinking market share. This information was reported by Bloomberg News, citing sources familiar with the matter. These job cuts are seen as a necessary step for Intel to reduce costs and focus on new business areas, such as advanced chip technologies and manufacturing improvements.

Despite the challenges, Intel remains a major player in the markets for personal computers and servers. However, the company has struggled to adapt to the rapid growth in demand for chips designed specifically for AI and other advanced applications. This demand has been met more successfully by competitors, leaving Intel to play catch-up.

In response, CEO Pat Gelsinger has initiated several key changes within the company. These include revitalizing Intel’s manufacturing capabilities, investing in the latest chip technologies, and exploring new markets to expand its business. Gelsinger’s turnaround plan aims to regain Intel’s competitive edge and position the company as a leader in the semiconductor industry once again.

In October 2022, Intel announced a comprehensive cost-reduction plan that included job cuts, referred to as “people actions.” This plan was part of a broader effort to slash annual costs by $3 billion in 2023. According to regulatory filings, Intel’s workforce was reduced to 124,800 employees by the end of 2023, down from 131,900 the previous year. The company projected that these measures would result in annual cost savings of between $8 billion and $10 billion by 2025.

The financial outlook for Intel’s data center and AI segments has been particularly concerning. Analysts expect these areas to experience a 23% decline in revenue, highlighting the challenges Intel faces in competing with other chipmakers who have been more successful in capturing the AI market.

Intel’s stock has also been affected by these challenges. The company’s shares have dropped 40% so far this year, reflecting investor concerns about its ability to navigate the competitive landscape and achieve growth. However, there has been a slight recovery, with a recent 1% increase in extended trading.

Overall, Intel is at a critical juncture as it seeks to address its current challenges and reposition itself for future success. The company’s efforts to cut costs, streamline operations, and invest in new technologies are part of a broader strategy to regain its market position and adapt to the evolving demands of the technology industry.