Intel is planning its first major layoffs in almost six years, according to a new report from Bloomberg. The report says that layoffs will “likely” affect thousands of its 113,700 employees, particularly in its sales and marketing departments, and that they could happen as soon as this month. Bloomberg says that Intel’s last major layoffs happened in 2016.
The alleged layoffs are the latest sign of trouble for the PC market and for the companies that make and sell PC components. Intel’s year-over-year revenue for Q2 dropped from $19.6 billion in 2021 to $15.3 billion in 2022, driven by decreases in Intel’s consumer PC and server businesses, and the company’s forecast for Q3 was similarly gloomy. Nvidia missed its most recent quarterly revenue projections by $1.4 billion, as the GPU shortage has ebbed and cryptocurrency-driven demand has dried up. And even though AMD is benefitting from Intel’s weakened position in the server market in particular, it is also signaling that it will miss its Q3 revenue estimates by about a billion dollars because of weakened PC demand.
Both businesses and individuals splashed out for more PCs as the COVID-19 pandemic began, so there are simply fewer people who need new PCs right now, regardless of larger concerns like inflation or recession. Prominent analysts can’t agree on how much the PC market has contracted this year, but they all agree that sales are down by double digits because of a decrease in consumer and business spending. IDC says that Q3 sales fell by 15 percent year over year, and that’s the most optimistic figure—Gartner claims it’s down by 19.5 percent, and Canalys says it’s down 18 percent. (IDC does note, however, that shipments remain “well above pre-pandemic levels.”)