Intel Corp. is planning on announcing “targeted” layoffs in November, according to a report late Thursday, citing an internal video shared with employees.
After the close of markets Thursday, The Oregonian reported that Intel Chief Executive Pat Gelsinger addressed employees via video, and promised more details on Nov. 1. Santa Clara, Calif.-based Intel has a large campus outside Portland, Ore.
“These are always hard decisions, but our costs are too high and our margins are too low,” Gelsinger told employees, according to the report. “We have to take actions to address them.”
Margins have been a sore point for Gelsinger ever since he announced his capital buildout plan since taking the helm of the chip maker in early 2021. Already, the CEO has had to walk back last year’s promise that margins would remain “comfortably above 50%” as the annual margin forecast for the year fell to 49%, while margins for rival Advanced Micro Devices Inc. have surpassed the 50% barrier recently.
Earlier in the month, Bloomberg reported that Intel would announce layoffs “as early as this month.”
Intel is scheduled to report earnings after the close of markets on Oct. 27. The last time Intel announced a large round of layoffs was in 2016, when it announced it was cutting 12,000 jobs, or 11% of its workforce, on the same day it reported quarterly earnings.
Intel has about 121,000 employees worldwide.
“We are not commenting on or confirming anything in this story,” an Intel spokesman told MarketWatch in response to a request for comment on The Oregonian report. The company is currently in its quiet period before earnings.
Intel stock dipped 0.8% in after-hours trading. Shares closed Thursday up 0.3% at $26.08, while the PHLX Semicondeuctor Index SOX, +0.69% rose 0.7%, and the S&P 500 index SPX, -0.80% declined 0.8%. Year-to-date, Intel shares are down 49%, the SOX index is down 43%, and the S&P 500 is off 23%.
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