A difficult passage for Intel

It was a bad financial quarter for Intel as well, highlighting a fairly common trend for large tech companies these days. The chipmaker reported net profits of $ 1 billion, 85% less than the same period last year (but still better than the previous quarter in which it was in the red of about $ 500 million), compared to a turnover of 15.3 billion dollars (3.9 billion less than in the same period of the previous year). As a result, the company announced a restructuring and cost reduction plan, which will also include layoffs.

Intel aims to save between $ 8 and $ 10 billion a year between now and 2025; they did not specify how many people will lose their jobs, but according to Bloomberg we are in the thousands. Reductions in working hours in factories will also be implemented for some workers; the divisions most affected should be the operational and marketing divisions. At the same time, the company will reinvigorate its initiatives to increase its production capacity at home.

As we have been able to observe, the market is presenting the bill to the big tech giants for the last two years of very strong growth thanks to the COVID-19 pandemic: from a situation of excessive demand we are moving to a of excessive supply - more is being produced than is needed, in other words, and therefore prices are falling, as are the profits of producers.

Speaking to Reuters, CEO Pat Gelsinger nevertheless confirmed that overall personnel expenses account for a minority of Intel’s overall balance sheet, so they will focus on where there are more savings margins, namely factories and foundries. Overall, however, investors were happy, as the forecasts were even worse, and Intel’s shares were up about 6% in the hours immediately following the announcement. However, Intel has revised down its estimates for the full year: now it expects to close with a turnover between 63 and 64 billion dollars, or between 2 and 4 billion less than previously assumed.