Intel is planning to lay off thousands of workers in the next month despite efforts to expand its semiconductor production facilities.
The computer part manufacturer is expected to announce the job reduction as early as this month, according to Bloomberg, with the changes arriving around the Oct. 27 quarterly earnings report. The staff reduction arrives as computer sales decline in the post-pandemic economy. Some divisions at the company could see cuts affecting more than 20% of staff.
The reductions were alluded to at the company’s last quarterly earnings call. “We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year,” Intel CEO Pat Gelsinger told investors.
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Worldwide PC shipments saw a notable decline year over year. The industry only sold 68 million units in the third quarter of 2022, according to preliminary data from Gartner. That is a 19.5% decline year over year. The majority of computer companies reported a decline in shipments, although Apple was able to avoid the drop in sales.
The news comes months after Congress passed legislation to help companies construct new semiconductor factories in order to help them compete with China. Intel announced its new Ohio-based factory in January, only to delay it over Congress’s inability to get the CHIPS Act passed. With the legislation passed, Intel is expected to receive tens of billions of dollars from the federal government to assist in covering production costs.
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Intel stock has seen its value dip over the year, and the company has attempted to ensure profit for its shareholders through internal cuts. The company’s share values have dropped more than 50% in 2022, with a 20% drop in October alone.
Intel did not respond to a request for comment from the Washington Examiner.
