Intel tightens belt, freezes hiring at its biggest revenue-generating unit
Intel Corp. has halted hiring at its PC desktop and laptop chip division, the biggest unit by sales at the semiconductor giant.
The Santa Clara-based company announced the move in a memo that went out on Wednesday, according to Reuters. It said that some hiring may resume in the unit in as little as two weeks and all current job offers will be honored.
The memo also called for other cost-cutting measures which include canceling some travel, limiting participation in industry conferences and holding group meetings virtually when possible.
In a separate note on Tuesday, Reuters reported that Intel CEO Pat Gelsinger announced that the company would "slow" hiring but would onboard 23,000 recently hired employees over the next 90 days. It had 121,000 employees at the end of 2021, with more than 7,000 of them in Silicon Valley. In Oregon, Intel is the largest employer in the Portland metro area with 21,000 workers. And in Arizona, Intel is the 12th largest employer in the state with more than 11,000 employees.
The "client computing unit" where the freeze is happening accounted for $9.3 billion of Intel's $18.4 billion in revenue in its most recent quarter. The group's revenue is down from $10.6 billion in the corresponding quarter in 2021, when the company reported $19.7 billion in total revenue.
The unit has run up against increased competition from Santa Clara-based Advanced Micro Devices Inc. (Nasdaq:AMD), and lost a major customer in Apple Inc. (Nasdaq:AAPL) after the Cupertino-based computer and mobile tech titan started to use custom-designed chips of their own.
"We believe we are at the beginning of a long-term growth cycle across the semiconductor industry and we have the right strategy in place," Intel said, per Reuters. "Increased focus and prioritization in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders, and employees.".
Intel stock (Nasdaq:INTC) has dropped by nearly 23% to date in 2022. It was down less than 1% in early trading on Thursday.
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