Thread regarding Intel Corp. layoffs

The company will have to get more serious than these layoffs, to get the headcount down to a level comparable to other companies in the industry.

Be lucky to break below 90k with this effort and needs to be at 60k just to get in the ballpark of what is needed, and 40k to get gross margin back to where it used to be.

This low level of cuts must be why the company hasn't said much about it. It is simply too low to comment and they don't want to look like they have overpromised or somehow underdelivered.

b-b-baby you ain't seen nothing yet

Everyone is expecting outsourcing to happen and maybe in such a big way that it redefines what it means to be a BB.

But the real shocker is if the company is preparing to sell fabs or entire sites to some other foundry.

They already have several fab private equity deals and maybe it will just be more of that, but even there one should expect the patience of those PE partners to be wearing thin, and they might force the company to sell those sites in order to recoup their invvestment. This includes the Ohio site.

At a time when other companies are building fabs all over the place for AI and all the other automation that is coming, Intel is running out of demand to use even the existing fabs, with several shells being built as well. And there is no current expectation that is going to change.

Intel fabs (particularly on older nodes) are not designed like a typical foundry fab, but they are closer than they used to be. The tools are modified to meet a PDK and design rules that are non-standard, but those can be reconfigured as needed.

So it is not a simple task to sell an Intel fab to a foundry, but especially for the older fabs the cost would be far less than building & equipping a new fab.

@ba I didn't call it AI-flipping but the idea is to shift specific job roles to a vendor which has already figured out how to leverage AI.

Intel has a vast array of job roles and it would not be cost effective to create AI tools for most of those roles.

Many of those roles do not add a competitive advantage, and that includes roles in TD and chip design. Lots of mundane, repetitive work done by a lot of engineers.

The support groups are the most obvious candidate. Intel is never really going to have world class supply chain, finance, IT, CS and such, and could likely improve the quality and cost effectiveness of those groups by outsourcing them.

So they go first but then on to those many thousands of engineers doing what is essentially non-strategic or project work.

Cadence did this, and all the larger tech companies are heavily into this transition. As usual, Intel is a laggard in this movement, but that means it can reap a lot of benefits as well, by following the other companies now that this operating model has been proven.

@OP i said major badge flipping coming 2 months ago. Heard no, no not possible. Well, here we are

@b4 what is meant by AI flipping? Are you saying AI determines what can be outsourced or are you saying AI creates technology? Thx

@b2 Google it. LBT did this at Cadence but the mass shifting of internal to outsource contractors is something that many, many companies have done.

Now with AI, companies are doing this flipping to get instant AI benefits without having to develop the technology themselves.

If anything, AI will greatly increase the movement of workers to specialized outsource suppliers.

This is just a bigger version of the existing outsourcing, where the company wants specific skills but doesn't need enough of that skill to justify maintaining a role at the level needed to be effective.

An example is how IT uses contract programmers for virtually all newer programming languages. They only keep BB to manage the older languages.

This is the future of work, at least until companies find specific roles where they can justify the AI investment to keep those workers inhouse.

@ae "typically" when have you experienced badge flipping where it happens so often that you can determine a trend?

"more productive and don’t need as many people" isn't this the purpose of all of the restructuring?

Some will have to roll on down the highway.

Badge flipping typically means a 50% HC reduction. And with the fat and productivity of Intel employees. That is what they do. Pay you less and optimize quickly. Wont have all Intel overhead as well so will be much more productive and don’t need as many people.

That’s always been a problem at Intel with people thinking they know something when they really don’t know and have their information wrong. This is just pure speculation.

If the outsourcing is done by badge flipping it isn't as bad as layoffs. People will still have jobs although they will most likely be with less benefits and lower salaries. If you aren't already looking for a new job you should be.