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As Revenue Declines, Intel Cuts Jobs and Spending
Since Intel (NASDAQ: INTC) struggles to increase its revenue due to excessive reliance on PC sales, a penny saved is a cent earned appears to be the company's new mantra.
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CIO Applications | Wednesday, November 02, 2022

Despite a plan to cut thousands of jobs and billions of dollars in annual spending, Intel remains vulnerable to declines in PC sales.
FREMONT, CA: Since Intel (NASDAQ: INTC) struggles to increase its revenue due to excessive reliance on PC sales, a penny saved is a cent earned appears to be the company's new mantra. By 2025, Intel plans to minimise annual spending by up to ten billion USD.
For the three months that ended on October 1st, Intel announced a startling 85 per cent profit decrease to USD 1 billion and a 20 per cent decline in revenue to USD 15.3 billion. Intel's revenue dropped 22 per cent from the prior quarter.
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The chipmaker also reduced its annual revenue projection to 63 billion USD, from USD 65 billion to USD 68 billion at the end of the previous quarter, less than the initial revenue guidance of USD 76 billion. This is the second time this year that the chipmaker has done so.
To offset the pitifully low profit, Intel stated that it would cut costs by USD 3 billion in 2023, increasing those savings to USD 8 billion to USD 10 billion annually by the end of 2025. This will help enhance margin, EPS, and stock price. However, their primary weakness is their overdependence on the PC and server segment. It had no presence in the mobile industry. It now trails AMD in server processors and Nvidia (NASDAQ: NVDA) in GPU and AI chips, respectively. The cost-cutting measures might also threaten thousands of jobs or around 20 per cent of Intel's staff. Intel CEO Pat Gelsinger indicated that staff reduction is indeed imminent but withheld further details.
Steps to optimise their headcount will be included in efforts. These are tough choices that impact the Intel family.
Client Computing Group's revenue, including PC processors, decreased 17 per cent to USD 8.12 billion. In the third quarter, PC shipments decreased by roughly 20 per cent, according to Gartner, following nearly two years of fast growth fueled by the pandemic.
Intel and its competitors are impacted by the drop in the PC market. However, compared to all of its competitors, Intel is more vulnerable to changes in PC market demand. For example, the client sector, which includes revenue from sales of PC and notebook chips, accounted for less than a fifth of AMD's USD 5.6 billion quarterly revenue, whereas for the Intel Client Computing Group, revenue represented more than half of its overall earnings.
However, Intel is falling behind competitors in markets like advanced semiconductors and data centres, which are expanding quickly. While AMD's data centre revenue increased 45 per cent in the same quarter, Intel's Datacenter and AI sector reported a 27 per cent fall in revenue to USD 4.21 billion. AMD recorded a 1,549 per cent growth in revenue for the embedded market. On the other hand, Nvidia's most recent quarterly results showed a 61 per cent growth in data centre revenue.
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