Chipmaker Intel is planning a major reduction in headcount, likely numbering in the thousands, in the face of a slowdown in the personal computer market, Bloomberg News reported on Tuesday, citing people with knowledge of the situation.
The layoffs will be announced as early as this month and some of Intel’s divisions, including the sales and marketing group, could see cuts affecting about 20 percent of staff, according to the report.
The company had 113,700 employees as of July, Bloomberg News said.
Intel declined to comment on the job cuts.
The company in July slashed its annual sales and profit forecasts after missing estimates for second-quarter results.
Decades-high inflation and the reopening of offices and schools have led people to spend less on PCs than they did during pandemic-related lockdowns.
Chipmakers are also under pressure from COVID-19 curbs in key PC market China and the Ukraine conflict that have led to supply-chain snarls and also weighed on demand.
Intel’s Chief Executive Officer Pat Gelsinger released a memo to company employees on Tuesday outlining plans to create an internal foundry model for external customers and the company’s product lines.
A foundry business builds chips that other companies design and Taiwan Semiconductor Manufacturing Company (TSMC) is the top player in that space. Intel has mainly built chips it designed itself so far.
Back in July, Intel announced it will produce chips for Taiwan’s MediaTek, one of the world’s largest chip design firms.
The manufacturing arrangement is one of the most significant deals Intel has announced since it launched its so-called foundry business early last year.
While Intel didn’t give any financial details of the deal or say how many chips it would be producing for MediaTek, it said the first products would be manufactured in the next 18- to 24- month period and will be in a more mature technology process called Intel 16, with the chips used for smart devices.