Thread regarding Intel Corp. layoffs

This appears to be the most consequential restructuring in the companies history.

LBT had stated his intentions, but word is getting out about entire groups being eliminated or outsourced, including the transition of entire groups to contract services.

This has been needed for at least the past 5 years and maybe 10, because once Intel lost market dominance it no longer made sense to maintain such a sprawling conglomerate. That makes this effort unlike anything the company has done, maybe ever.

I think this is why internal communications have left room for interpretation and that there has been effectively no external communication (resulting in uncertainty which is causing the stock to jump around). I think ELT doesn't want anyone to grasp the full scope of what they are doing, until it is completed and they can call it the New Intel.

What will follow will be some asset sales, but in many cases the underperforming products have little market value, so the company is shutting down those groups and maybe will try to sell the IP. It also enables the company to be broken up, which the Board seems to want to keep as an option.

The much expected Fab restructuring has also begun but that will take a year or two and be done in phases. Expect LBT to shorten the runway to IFS profitability, by any means necessary.

The result of these efforts will meaningfully lower cost and it is possible that the company could report positive earnings (excluding the one time charge). Hard to see any of this as a negative for the stock in the short term, although some things may break or have to be rebuilt, and that could cause issues down the road.

by
| 4841 views | | 21 replies (last July 12) | Reply
Post ID: @OP+1jxjb4hf8

21 replies (most recent on top)

Actually, looks a lot like more of a fab cleanup than anything major.

True, NEX and Automotive are to be shut down, with other product groups likely up for sale.

But the real serious work is yet to come, flipping BB to GB and the possible sale of several fab sites and some individual fabs.

Those things take time, so for right now it is just about lowering cost to be at least not so out of line with revenues. Not enough, but a good start.

by
| | Reply
Post ID: @4j0+1jxjb4hf8

It's not as big as the restructuring the company did in 1970, where they laid off a third of the workforce.

LBT will need to get much more serious about this to outdo Andy.

by
| | Reply
Post ID: @2en+1jxjb4hf8

@w3 With the notifications, people are starting to get a sense of how the organization is going to eventually be reduced to something more manageable.

LBT is finishing what BK started, presumably without all the hanky-panky and poor EUV decisions.

by
| | Reply
Post ID: @11f+1jxjb4hf8

Definitely a situation where it pays to focus on the actions and not the words.

LBT and the Board are never gonna lay out the strategy for all to understand.

Similar to all the rumors about various companies being interested in parts of the company. Then it turns out that the Board was actually in discussions with all of them.

by
| | Reply
Post ID: @w3+1jxjb4hf8

Just don’t touch def met team no matter what!

by
| | Reply
Post ID: @ee+1jxjb4hf8

@ea
If canning most of the marketing org is true, I think LBT is on the right path. Intel marketing has been lackluster anyways and it is not Intel's core business. It is better Intel outsources it to a company which is expert in marketing. Many low/no revenue pet projects need to be cut off. Same for so many homegrown software/tools which are mediocre at best. These are just distractions and money pits.

Intel should focus on architecting/designing/ manufacturing world class Si. That is it. Every other supporting function is secondary and whatever can be outsourced should be outsourced.

by
| | Reply
Post ID: @ec+1jxjb4hf8

@e7 Just describing what I think it happening. This is different from anything I can recall in the past 25 years with intel.

Certainly I don't see the situation as binary or somehow leading to a fixed outcome, but it does look like the Board remains committed to x86, and doesn't see the need to cannibalize it with ARM. Competition may force them to alter that strategy, but until then the company is going to keep getting smaller and more compact.

Clearly the conglomeration is being reduced and I can't think of how that is a bad thing. A lot of wasted capital and effort went into trying to extend x86 market dominance and that should have been scaled back years ago.

So the company is dealing with that, finally, but remains seemingly oblivious to the market reality that x86 is a fading architecture.

by
| | Reply
Post ID: @ea+1jxjb4hf8

@OP
Congratulations! You managed to get 100% up votes in almost 24 hours. Not even the trolls dare to down vote you. That is no small feat. 😂

by
| | Reply
Post ID: @e7+1jxjb4hf8

It will never return to its former glory.

The competition sees us in their rear view mirror and is pressing harder on the accelerator.

Layoffs and selloffs will continue.

by
| | Reply
Post ID: @dh+1jxjb4hf8

Who said restructuring will make it better? Look at the top layers of managers, who knows Intel business or who is an expert?

Almost none. A ton of non relevant people came to restructuring, it is getting worse.

The worst 5 years for Intel.

by
| | Reply
Post ID: @bz+1jxjb4hf8

It's the first phase of a dismantling, realignment, and possible sell-off of Intel’s legacy identity. The cuts, outsourcing, asset liquidation, morale collapse, and leadership behavior all mark this as unprecedented in scope and strategic consequence.

This isn’t just consequential...

It’s existential.

by
| | Reply
Post ID: @b4+1jxjb4hf8

Give up. I work here and I’m still not buying Intel stock!

by
| | Reply
Post ID: @b2+1jxjb4hf8

Same vague comms but because we’re breaking the company apart

by
| | Reply
Post ID: @b1+1jxjb4hf8

The older fabs are to be sold or bought into by private equity.

Those are the asset sales that will wipe out the company debt, so should be good for the stock.

It does look like they are in Seek & Destroy mode for anything that does not support the growth or profit margin targets. Plus of course anything which is merely a cost and does not support revenue, but that stuff has been cut a lot over the years.

Add in the badge flipping and outsourcing that is coming and it might enable headcount to get down to 50k or so, comparable to peer revenue per head. Remember, there didn't used to be an SMG group. That was one of those things that was built up to try to maintain dominant market share, so obviously is now just a cost center. Plenty of other examples of the conglomerate metastasizing over the past 25 years in the vain attempt to overcome an increasingly flawed strategy.

Like John Gotti, Intel gonna be x86 now, forever, till the day it dies.

by
| | Reply
Post ID: @ax+1jxjb4hf8

@OP This makes sense to me if you outsource all of IT, HR, and most of any other kind of support groups.

by
| | Reply
Post ID: @an+1jxjb4hf8

If you'd payed any attention the past couple weeks the fabs have begun to run empty

by
| | Reply
Post ID: @ag+1jxjb4hf8

Lots of words. All too late.

by
| | Reply
Post ID: @af+1jxjb4hf8

My only hope is that LBT knows what he is doing. But David Zinsner still being the CFO and LBT calling him his trusted partner doesn't gives me any positive vibes.

by
| | Reply
Post ID: @a9+1jxjb4hf8

OP is Intel ELT.

by
| | Reply
Post ID: @a5+1jxjb4hf8

Hopefully nepotism kings like SK, Srinivas Lingam of NEX will be gone

by
| | Reply
Post ID: @a1+1jxjb4hf8

Post a reply

: