15,000 Intel job cuts announced, with Apple and Microsoft key factors in the decline

Some 15,000 Intel job cuts have been announced by the company, as it implements a $10B cost-reduction program to try to resolve its financial difficulties.

Intel CEO Pat Gelsinger told employees that revenues have not grown in the way the company hoped, with a belated acceptance that Apple’s Mac business is gone forever one likely factor in that reality-check …

Intel’s inability to accept the reality of Apple Silicon

It’s now more than four years since Apple announced its transition from Intel processors to its own chips for its Mac line-up, but Intel seemed to have a hard time accepting that there was no way back.

The company initially acknowledged it was currently behind, but claimed it could retake the lead by 2025. Gelsinger described Apple Silicon as “pretty good,” but still believed Intel could win back the company’s business.

Now Microsoft has joined the ARM party

Things didn’t get any better for Intel when Microsoft started making its own transition to ARM-powered Windows PCs.

The writing was on the wall late last year when the company’s plans were reported.

As for Windows-based devices, all signs point to their increasingly being based on non-Intel processors. Finally, Windows is likely to run on the cloud in the future, where it will also run on non-Intel chips.

We saw a huge step down this path when the company announced AI-focused, ARM-powered laptops back in May.

Microsoft was especially eager to show how its new ARM-based PCs could outperform Apple’s M3 MacBook Airs, both in sheer performance as well as battery life. The Mac vs. PC fires were very much being stoked in this presentation.

Intel announces 15,000 job cuts

The company yesterday reported a $1.6B loss in Q2, and said that it would be cutting around 15% of its workforce in response.

We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our head count by roughly 15,000 roles, or 15% of our workforce. The majority of these actions will be completed by the end of this year.

Gelsinger said it was a painful decision, but a necessary one to stem the losses.

Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected […]

I have no illusions that the path in front of us will be easy. You shouldn’t either. This is a tough day for all of us and there will be more tough days ahead. But as difficult as all of this is, we are making the changes necessary to build on our progress and usher in a new era of growth.

Photo by BoliviaInteligente on Unsplash