Report: Intel Planning Layoffs As PC Market Dives

Even as Intel is moving to build semiconductor manufacturing and packaging facilities in Ohio, Arizona and New Mexico, the company is potentially looking to lay off thousands of employees due to a slump in the PC market, Bloomberg reported.

Intel late this month could announce a layoff of thousands of its employees as the company deals with a big downturn in the PC market, Bloomberg reported Tuesday.

Bloomberg, citing unnamed people who have knowledge of the situation, reported that Intel may be reducing its head count by thousands of employees. The layoffs are likely timed to happen later this month given that Intel will report its third fiscal quarter 2022 finances on Oct. 27.

An Intel spokesperson told CRN in a response to a request for more information that the Santa Clara, Calif.-based company declines to comment on the report.

[Related: Intel IDM 2.0 Part 2: Intel Creates Internal Foundry Model]

The possibility of big layoffs at Intel comes as the PC market appears headed for a sustained slowdown. Research firm IDC earlier this month reported that third-quarter 2022 shipments of traditional PCs, which it defined as including desktop PCs, notebooks and workstations but not tablet PCs, detachable tablet PCs or servers, fell 15 percent compared with the third quarter of 2021 to a total of 74.3 million units.

According to IDC, PC shipments, while still higher than before the pandemic, are falling now and will for the next several quarters because business users and consumers purchased more PCs than normal because of the COVID-19-induced work-from-home movement, leading to a saturation of the market and cutting demand going forward.

Another research firm, Canalys, estimated at the same time that worldwide combined third-quarter 2022 shipments of desktop and notebook PCs fell 17.7 percent to 69.4 million units.

Intel is not unique in the potential impact from falling PC sales.

Intel rival AMD last week saw its share prices plummet the day after reporting preliminary third fiscal quarter 2022 financial results. The Santa Clara, Calif.-based semiconductor manufacturer said its third fiscal quarter 2022 revenue is likely to fall around $1.1 billion to about $5.6 billion.

Intel in late July reported that its second fiscal quarter 2022 revenue of $15.3 billion was down 22 percent year over year, led by a 25 percent fall in client computing-focused revenue.

Intel as of July had 113,700 employees, Bloomberg said. This is down from the 121,000 employees the company had in 2021, according to Intel.

Potential layoffs come as Intel is looking to build for the future. The company last month broke ground on planned $20 billion semiconductor manufacturing facilities in Ohio, to be built in part with financial support from the U.S. government’s CHIPS Act aimed at boosting domestic high-tech manufacturing.

Intel also plans to invest another $20 billion in two new fabs in Arizona and $3.5 billion in semiconductor packaging facilities in New Mexico.