Intel Plans Thousands of Job Cuts In Face of PC Slowdown 50
An anonymous reader quotes a report from Bloomberg: Intel is planning a major reduction in headcount, likely numbering in the thousands, to cut costs and cope with a sputtering personal-computer market, according to people with knowledge of the situation. The layoffs will be announced as early as this month, with the company planning to make the move around the same time as its third-quarter earnings report on Oct. 27, said the people, who asked not to be identified because the deliberations are private. The chipmaker had 113,700 employees as of July. Some divisions, including Intel's sales and marketing group, could see cuts affecting about 20% of staff, according to the people.
Intel is facing a steep decline in demand for PC processors, its main business, and has struggled to win back market share lost to rivals like Advanced Micro Devices Inc. In July, the company warned that 2022 sales would be about $11 billion lower than it previously expected. Analysts are predicting a third-quarter revenue drop of roughly 15%. And Intel's once-enviable margins have shriveled: They're about 15 percentage points narrower than historical numbers of around 60%. During its second-quarter earnings call, Intel acknowledged that it could make changes to improve profits. "We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year," Chief Executive Officer Pat Gelsinger said at the time.
Intel's last big wave of layoffs occurred in 2016, when it trimmed about 12,000 jobs, or 11% of its total. The company has made smaller cuts since then and shuttered several divisions, including its cellular modem and drone units. Like many companies in the technology industry, Intel also froze hiring earlier this year, when market conditions soured and fears of a recession grew. Gelsinger took the helm at Intel last year and has been working to restore the company's reputation as a Silicon Valley legend. But even before the PC slump, it was an uphill fight. Intel lost its long-held technological edge, and its own executives acknowledge that the company's culture of innovation withered in recent years. Now a broader slowdown is adding to those challenges. Intel's PC, data center and artificial intelligence groups are contending with a tech spending downturn, weighing on revenue and profit.
Intel is facing a steep decline in demand for PC processors, its main business, and has struggled to win back market share lost to rivals like Advanced Micro Devices Inc. In July, the company warned that 2022 sales would be about $11 billion lower than it previously expected. Analysts are predicting a third-quarter revenue drop of roughly 15%. And Intel's once-enviable margins have shriveled: They're about 15 percentage points narrower than historical numbers of around 60%. During its second-quarter earnings call, Intel acknowledged that it could make changes to improve profits. "We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year," Chief Executive Officer Pat Gelsinger said at the time.
Intel's last big wave of layoffs occurred in 2016, when it trimmed about 12,000 jobs, or 11% of its total. The company has made smaller cuts since then and shuttered several divisions, including its cellular modem and drone units. Like many companies in the technology industry, Intel also froze hiring earlier this year, when market conditions soured and fears of a recession grew. Gelsinger took the helm at Intel last year and has been working to restore the company's reputation as a Silicon Valley legend. But even before the PC slump, it was an uphill fight. Intel lost its long-held technological edge, and its own executives acknowledge that the company's culture of innovation withered in recent years. Now a broader slowdown is adding to those challenges. Intel's PC, data center and artificial intelligence groups are contending with a tech spending downturn, weighing on revenue and profit.
Considering company performance. How about (Score:4, Insightful)
Re:Considering company performance. How about (Score:5, Insightful)
If management in general was intelligent enough to reason like this, they won't be in this predicament in the first place.
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Because bottom tier people are easily replaceable with minimal damage to the company, but lose one or two key top tier talent people and your entire company with its tens of thousands of employees is in trouble.
Re:Considering company performance. How about (Score:5, Insightful)
another view might be
"the wrong top tier talent and your entire company is in trouble along with its tens of thousands of employees."
Organizations often fire the wrong individuals.
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I don't see a meaningful difference between those two.
Not enough from sales and marketing (Score:4, Insightful)
Sure, they have some weirdo projects they need to ax, but they got bloated with sales and marketing people. You don't need TV ads for processors. You need a smaller, technical sales/marketing team that maintains vendor relationships via communicating useful technical details things like supply, roadmap and so on.
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45% margin?! (Score:4, Interesting)
Re:45% margin?! (Score:5, Informative)
I'm not an accountant but what I think that means is every time they sell a processor they get almost twice what it cost them to manufacture it, which sounds like a lot, but they have to spend hugely on R&D to bring a chip to market and those costs don't go down much if their sales slump, which they are. So if sales volume doesn't rebound soon, they need to cut expenses or it won't be long until they're losing money.
Re:45% margin?! (Score:4, Informative)
You can go on NewEgg right now and buy a 5600 for $130 which is just nuts. Intel is forced to compete. Basically knocked a hundred to $200 off the price of every one of Intel CPUs
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The other interesting part is that AMD is in equally nasty trouble right now with their latest lineup. Which is sitting on the shelves, with almost no one wanting them.
Everyone is buying those AMD's 5x00 CPUs. They're cheap, the rest of the platform (motherboard, memory) is cheap, they have good performance per energy spent and, and have high general performance very well.
There's really nothing out there that competes with them. From any Intel generation or AMD's newest. It's weird, but also great for consu
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The current generation AMDs do kind of spank the last generation on single core performance and that's still a factor in gaming. They're also quite a bit faster in multicore.
The only problem they have is that right now and i5 12600 is still all you need and will be for a couple of years. On the other hand availability is spotty outside the United States
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Nothing lasts, but they seem to have a lot of supply due to being set for pandemic level demand, and demand cratered recently due to recession combined with overpurchasing that happened during the pandemic.
BS. (Score:2)
heh. Apple drops them. AMD is kicking their ass. It all stems from bad management and who will suffer for it? ICs.
Maybe a few of those laid off ICs will be smart and go work at AMD or *shudder* Apple.
Intel needs a good spanking but this is simply an excuse for them. With all the shortages and pent up demand ... not buy this "slow" down crap. Nope.
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Apple drops them... It all stems from bad management
Apple dropped Intel for reasons that had little to do with bad management.
Switching to ARM and bringing processor design entirely in-house was a big win for Apple, and there was nothing Intel could have done to stop it.
With all the shortages and pent up demand ...
There are no shortages or pent-up demand for PCs. It's a buyer's market.
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Product quality and repeated delays were major factors that motivated Apple. Surely that stems from bad management?
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Apple became the number one filer of complaints.
Apple had high standards, which is to say, they expected the processor to both provide correct results and not embarrass them in the security department.
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Bean counters did this (Score:1)
...they thought they could shuffle finances and deals around to make a profit instead of rely on R&D, and it kind of worked in the short term, but caught up with them.
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Honestly, the rapid rise of AMD's ryzens since ryzen 3 seems to have as something of a surprise to AMD as well. They were severely supply constrained even before the pandemic issues. And now they decided to become the new Intel with its current "we can put a massive margin with super expensive motherboards and new expensive memory". Remember Pentium 4 and its RDRAM total platform cost fiasco?
Right now, the previous generation AMD is selling like hotcakes. Intel is sorta kinda ok with their big.LITTLE archit
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You make some good points, but I'm wondering if you could point me to something that measures the fan noise of the latest generation vs earlier generations. I haven't found anything with a quick search. From reading about the 95C temperature of the CPU it seems this is by design, and the fan only spins up when the power use pushes the temperature above this. The temperature is meant to be the new limiting factor for performance, t
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You're suggesting that every OEM reworked their fan controls from decades old, well developed and reliable logic that worked off thermal sensors to a completely new and untested logic based on some kind of arcane, completely new combination of temperature, voltage and current that is not only unique to this generation, but must be adapted to each CPU individually?
And they have this logic not only ready and bug free as it has to be (because failures here lead to forced shutdowns), but actually deployed?
So I
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You have existing software for fan controls that controls for "required compute load" rather than temperature?
Who has this? Last I checked, even "gaming grade" boards like Asus ROG still had the same legacy software they had for well over a decade at this point, which controls fan speed curve based on CPU temperature. And temperature to speed relationship is user adjustable across the entire curve.
And latest AMD generation is specifically designed to turbo up until CPU is at 95C, after which it drops the cu
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Operating system actually outsources fan speed control either to BIOS level driver or if you have a more advanced motherboard to whatever OS driver is installed. For example Asus boards which I'm most familiar with have windows software package called AI Suite which monitors and controls a lot of features on the motherboard via OS level driver.
A part of that package is utility called Fan Xpert (you can google to find out how it looks and works, it had many versions which don't really add significant functio
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In my experience, fans that come with boxed coolers are generally not the quietest or the best performing ones. And the cooling blocks are nothing special too.
And TDP generally is goin
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And now they decided to become the new Intel with its current "we can put a massive margin with super expensive motherboards and new expensive memory". Remember Pentium 4 and its RDRAM total platform cost fiasco?
How is that situation anything like this one? AMD went from DDR4 to DDR5. This is after Intel did. This is after almost 8 years on DDR4. You make it sound AMD's leaders are in a boardroom laughing maniacally plotting to screw you over.
As with every new generation of tech, the initial stuff is more expensive. X470 boards were more expensive than later B450 boards. X570 were initially way more expensive than later B550 boards. DDR4 was expensive in the beginning. Also I do not think you are aware that AMD d
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Sure, let me explain this to you like you're five:
Intel with P4 platform: Mandatory very expensive new memory technology with no way to install older cheaper memory.
AMD with latest ryzen platform: Mandatory very expensive new memory technology with no way to install older cheaper memory.
Intel with their latest platform: Optional very expensive new memory technology with a way to install older cheaper memory.
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Let me explain this to you as you seem ignorant of basic economics. Few if any people care about technology that is almost significantly worse in terms of price to performance.
This is why there are billions of people driving cars in the world, and yet almost no one cars with super advanced technology like latest Lambos. This is why most people in the world need houses, and almost no one lives in a hyper-expensive mansions build of the latest and greatest technology. This is why almost no one bought P4 while
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Let me explain this to you as you seem ignorant of basic economics. Few if any people care about technology that is almost significantly worse in terms of price to performance.
Again this is ALL ABOUT YOU. You are aware that computers have FOR DECADES moved from one generation of memory to the next one. You are the only one that seems puzzled by this concept. Let me explain this progression. DDR to DDR2 to DDR3 to DDR4 now to DDR5. Sometime in the future, they will go to *gasp* DDR6. When they do, it is not to screw you over as you seem to portray the victim here.
This is why there are billions of people driving cars in the world, and yet almost no one cars with super advanced technology like latest Lambos. This is why most people in the world need houses, and almost no one lives in a hyper-expensive mansions build of the latest and greatest technology.
WTF are you talking about? AMD going from AM4 to AM5 WAS EXPECTED and this is nowhere close to all cars becoming multi-
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You know what, I'll grant you everything. On one condition.
You demonstrate to me that when you're presented with a choice in a field you don't have fetishism for, you opt for a far less cost effective goods in most cases.
Because no one is like that. Not even the most vapid fashionistas. Even they tend to understand the concept outside the field which they fetishise.
Price tags (Score:2)
But (Score:2)
But, sadly, the US govt needs to come to their aid with massive orders for chips for military equipment, which is currently being depleted in Ukraine, and which needs to be beefed up for the upcoming Taiwan war.
This is what I did when they did this in 2016 (Score:2)