Intel revises full-year forecast – plans cost reductions
The US chipmaker has been featured heavily in the media for its recent expansions. But following a weaker third quarter, the company is revising its full-year revenue guidance and readying itself to cut costs
Intel recorded revenues of USD 15.3 billion during the third quarter of 2022, down 20% from the same quarter in 2021. Net income ended up at USD 1.0 billion, a significant decrease of 85% from USD 6.8 billion during the same period last year.
With the poor performance of the third quarter, the company is revising its full-year revenue guidance to USD 63 billion – USD 64 billion, reflecting the continued macroeconomic headwinds.
“Despite the worsening economic conditions, we delivered solid results and made significant progress with our product and process execution during the quarter,” says Pat Gelsinger, Intel CEO in the third quarter report. “To position ourselves for this business cycle, we are aggressively addressing costs and driving efficiencies across the business to accelerate our IDM 2.0 flywheel for the digital future.”
The company says that it is focused on driving USD 3 billion in cost reductions in 2023, growing to USD 8 billion to USD 10 billion in annualised cost reductions and efficiency gains by the end of 2025.
When asked about potential layoffs related to this by Reuters, the CEO said that “people actions” would be a part of the cost reduction plan.
“The amount that we can do with respect to people costs is a minority of our overall cost structure. So driving efficiency in the factory network is way more important to our economics than people cost,” Gelsinger told Reuters. He also stated that adjustments of flexible workforces could be “quite immediate”.