Intel is a Victim of its Own Arrogance
Intel faces significant challenges, reporting a revenue decline and planning to cut 20,000 jobs. Its stock has dropped 31%, and competitors like AMD and NVIDIA are outpacing it in innovation.
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Intel's recent financial performance has been disappointing, with the company announcing a significant decline in revenue and plans to cut 20,000 jobs, representing about 14% of its workforce. The company's stock has plummeted by 31% in a month, resulting in a loss of over $30 billion in market capitalization. Intel's leadership had anticipated a rebound in 2024, but the current trends suggest otherwise. The company has struggled to adapt to market changes, particularly with the rise of ARM architecture, which has gained substantial market share due to its focus on power efficiency. In contrast, Intel has relied on older designs and increased power consumption, leading to inefficiencies in key segments like laptops and data centers. Competitors such as AMD and TSMC have outpaced Intel, with AMD making significant advancements in processor design. Additionally, Intel's late recognition of the importance of artificial intelligence has further hindered its position, as NVIDIA has transformed into a leading AI data center provider. As Intel cuts jobs and benefits, it risks losing talented employees to competitors, especially with recent changes in non-compete regulations. The company's past arrogance and complacency have contributed to its current challenges, highlighting the dangers of underestimating competition and failing to innovate.
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6 commentsThere is also a huge political headwind when it comes to onshoring leading edge semiconductor fabrication - no company will benefit from this more than Intel.
I’d expect more pain in the medium term - they certainly missed the AI boat - but I wouldn’t be surprised if Gelsinger succeeds in turning things around, and I’m rooting for them. Competition between AMD and Intel, and between TSMC and Intel - will be nothing but favorable for core count, $/core, and the continuation of Moore’s Law.
"As evidenced by Apple’s M series chips, ARM has taken a huge bite out of x86’s market share. While ARM was focused on power efficiency, Intel was trying to brute force power out of older designs by throwing more watts into every successive chip. In the massive laptop and data center segments, this is a losing strategy. Not only that, but they significantly missed out on EUV by not investing a decade ago. Now the combination of TSMC, AMD, and ARM are slowly but surely eating away at Intel’s market share. All 3 companies are worth significantly more than Intel at this point."
https://news.ycombinator.com/item?id=33529838
Intel has a bigger problem because they are building fabs and chips but they’ve been working on their new plan for a few years
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Intel shares fall 20% on plans to cut 15,000 jobs
Intel plans to cut 15,000 jobs and reduce capital spending by 20% to stabilize finances amid challenges. Shares fell 20% as revenue declined, raising concerns about its recovery strategy.
Intel to lay off 15,000 employees
Intel plans to lay off 15,000 employees, over 15% of its workforce, to cut costs by $10 billion by 2025, following disappointing earnings and a challenging market outlook.
Intel to shed at least 15% of staff to drive down costs
Intel plans to lay off over 16,000 employees, cut capital expenditures, suspend dividends, and outsource chip production to TSMC, following a $1.6 billion loss in Q2 2023.
Intel's Day of Reckoning Arrives: 15,000 Jobs Will Be Eliminated
Intel plans to cut 15,000 jobs, about 15% of its workforce, to save $10 billion by 2025 after a $1.6 billion Q2 loss, amid increasing competition and operational challenges.
What is going wrong for Intel?
Intel reported a 1% sales decline and a $1.6 billion net loss for Q2 2024, prompting plans to cut 15,000 jobs and suspend dividends, leading to a nearly 30% drop in share price.