Exclusive Reuters reporting reveals potential upcoming cost-saving measures likely to be put forward by Intel CEO Pat Gelsinger to the company’s board of directors later this month.
Citing an unnamed source familiar with the matter, Intel plans to set free unnecessary businesses and revamp capital spending in order to address ongoing finance concerns.
The California chipmaker recently posted quarterly revenue of $12.8 billion, down 1% year-on-year, while simultaneously predicting similar next-quarter income of $12.5 billion to $13.5 billion.
Intel could be doing some more cost-cutting
Gelsinger expressed concern about the company’s Q2 results: “Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones.”
Company CFO David Zinsner blamed gross margin headwinds from Intel’s AI PC efforts as well as “higher than typical” costs relating to non-core businesses for the poor performance.
Reuters reports that the CEO could announce plans to sell its programmable chip unit Altera.
Gelsinger’s plans may also include a pause – or termination – to Intel’s $32 billion Germany factory plans, which have already been delayed.
Once a market leader, Intel has struggled to play catchup against other established rivals in the AI race. It currently has a market cap of $94.04 billion, placing it far behind AMD ($240.44 billion market cap, $5.8 billion in revenue last quarter) and Nvidia ($2.93 trillion market cap, $30.0 billion in revenue last quarter).
The news comes around a month after the company laid off around 15,000 of its workers, accounting for some 15% of its headcount. At the time of the announcement, Gelsinger stated: “We must align our cost structure with our new operating model and fundamentally change the way we operate.”
Intel declined to comment.
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