Exclusive Reuters A report reveals potential cost-saving measures that Intel CEO Pat Gelsinger is likely to present to the company's board later this month.
Citing an anonymous source familiar with the matter, Intel plans to cut back on unneeded business and revamp capital spending to address current financial problems.
The California chipmaker recently posted quarterly revenue of $12.8 billion, down 1% from a year earlier, while forecasting similar revenue for the next quarter of between $12.5 billion and $13.5 billion.
Intel may be making further cost cuts
Gelsinger expressed concern about the company's second-quarter results: “Our financial performance in the second quarter was disappointing, even as we achieved key milestones in product and process technology.”
The company's chief financial officer, David Zinsner, blamed the poor performance on gross margin headwinds stemming from Intel's efforts in artificial intelligence-enabled PCs as well as “higher than usual” costs related to non-core businesses.
Reuters reports that the CEO may announce plans to sell its programmable chip unit Altera.
Gelsinger's plans could also include pausing — or terminating — Intel's plans for a $32 billion factory in Germany, which have already been delayed.
Once the market leader, Intel has struggled to catch up with established rivals in the AI race. It currently has a market cap of $94.04 billion, putting it far behind AMD ($240.44 billion market cap, $5.8 billion revenue last quarter) and Nvidia ($2.93 trillion market cap, $30 billion revenue last quarter).
The news comes about a month after the company laid off about 15,000 workers, or roughly 15% of its workforce. At the time of the announcement, Gelsinger said: “We must align our cost structure with our new operating model and fundamentally change the way we operate.”
TechRadar Pro asked Intel to confirm the report, but the company did not immediately respond.
