Fears for Irish jobs as Intel plans global cuts – The Irish Times
There are fears for jobs at Intel’s Irish business after the chip giant pledged to cut costs to cope with a continued fall in demand for computers that is dragging down sales and profits and hinders its recovery efforts.
In announcing its third-quarter results on Thursday, Intel said measures such as workforce reductions and slower spending on new factories would result in savings of $3 billion next year, with annual cuts up to $10 billion by the end of 2025.
But the impact of the global budget cuts on the company’s 5,000 employees in Ireland is not yet known, nor is the potential impact on future hiring. A company spokeswoman said the cuts would be decided based on business groups rather than geographic location. the situation should become clearer in the coming weeks.
According to Intel’s current investment plans, jobs in Ireland are expected to reach around 6,500. Intel announced earlier this year that it would invest an additional €12 billion in its Fab 34 factory by the end of 2023 , bringing the total invested in Ireland since 1989 to €30 billion.
The state narrowly missed welcoming two new semiconductor factory sites in Magdeburg, Germany. In addition to the new German factories, Intel is also creating a new R&D and design center in France, and announced manufacturing, foundry services and back-end production in Italy, Poland and Spain.
Chief Executive Pat Gelsinger had banked on a rapid rebound in semiconductor sales to help fund his ambitious plans to restore Intel to its former dominance in the $580 billion industry. Gelsinger, who three months ago predicted the third quarter would be the company’s worst performance, instead said demand for Intel’s computer processors has fallen even more sharply than expected and the outlook remains bleak.
“Macro aggravation was history and is history,” Mr. Gelsinger said in an interview. “There is no good economic news. Predicting a bottom for the computer chip market would currently be “too presumptuous,” he said.
Net income for the third quarter was $1 billion, or 25 cents per share, compared with $6.8 billion, or $1.67 per share, in the same period a year ago. Revenue fell 20% to $15.3 billion. Prior to certain items, earnings were 59 cents per share. Wall Street was looking for a profit of 33 cents on sales of $15.4 billion.
News of potential job cuts broke earlier in the month, with rumors of a major downsizing, likely numbering in the thousands. Some divisions, including Intel’s sales and marketing group, could see staff cuts of around 20%, sources say.
Intel’s last big wave of layoffs came in 2016, when it cut about 12,000 jobs, or 11% of its total. The company has made smaller cuts since then and closed several divisions, including its cellular modems and drone units. Like many companies in the tech industry, Intel also froze hiring earlier this year when market conditions deteriorated and fears of a recession grew. – Additional reports: Bloomberg