Intel Forecasts Growth, Plans Workforce Reduction

Intel's Q2 Financial Performance

Intel reported Q2 revenue of $12.86 billion, aligning with analysts' expectations. However, the company posted an adjusted net loss of $441 million, translating to a loss of 10 cents per share. This marked a significant decline compared to the adjusted net income of $83 million, or 2 cents per share, in the same quarter last year. The results highlight ongoing challenges in navigating competitive pressures and macroeconomic uncertainties. Intel's foundry business, which focuses on manufacturing chips for third-party customers, demonstrated resilience with 3% growth, generating $4.4 billion in revenue—slightly exceeding market estimates.

Optimistic Q3 Revenue Forecast

Intel issued a Q3 revenue forecast ranging between $12.6 billion and $13.6 billion, surpassing Wall Street's average projection of $12.6 billion. This optimism is largely attributed to the strong performance of its foundry business, which continues to gain traction despite stiff competition in the semiconductor market. CFO David Zinsner emphasized the company’s solid demand trends and improved execution of strategic priorities as key drivers of growth. The forecast underscores Intel's strategic focus on revitalizing its core operations and leveraging its growing foundry segment to counterbalance weaknesses in other areas.

Workforce Reductions and Cost-Cutting Measures

Intel plans to reduce its workforce by 15% by 2025, bringing its headcount to approximately 75,000 employees. This initiative, part of broader cost-cutting measures, aims to streamline operations and create a more agile organizational structure. CEO Lip-Bu Tan highlighted the importance of these reductions in enhancing efficiency and competitiveness in a rapidly evolving industry. The company has also implemented structural changes, including a 50% reduction in management layers, to drive accountability and responsiveness. These measures align with Intel's strategy to reinvest savings into high-priority areas such as AI and advanced chip technologies.