Intel like many other tech companies has placed a freeze on new hires as a measure to cut their costs. Currently, U.S. is facing the challenge of worsening economy and declining of consumer demand for chips. Therefore, the challenges on the economic front have forced Intel to impose a hiring freeze.
Declining consumer demand
Intel is one the largest chipmakers in the world. The chip crisis of 2021 was a boon for the chipmakers. Many chip producers reported record revenues during 2021. However, the demand of chips is declining and the chipmakers are facing the heat now. Therefore, a huge number of Silicon Valley tech companies have put a hiring freeze on tech jobs. Intel is among the latest companies to join them.
Reduced profits during last quarter
“Increased focus and prioritization in our spending will help us weather macroeconomic uncertainty, execute on our strategy, and meet our commitments to customers, shareholders, and employees,” Intel said in statement. The client computing group which designs end-user hardware is Intel’s largest by sales. They generated $9.3 billion profit in last quarter which account for 50% of Intel’s total profit. However, this was lower than expected profit during the second quarter. The chipmaker giant cited reduced PC chip sales as the reason for reduced profits. Moreover, Intel’s CFO referred to China’s prolonged COVID-19 lockdowns as a reason for supply related constraints.
CEO Pat Gelsinger told employees that they are slowing the hiring. However, Intel is still determined to bring 23,000 new people in the next 90 days. Although they will hire these new people outside the cloud computing group. Moreover, the company announced that they will honor all existing job offers within cloud computing group.
Measures to reduce costs
Intel shares are down nearly 28% over the past year. Moreover, the company has told the investors to expect lower margins as compared to the past. Alongside, intel has also planned to implement certain other measures to reduce costs. These include cancelling some travel for the group immediately. In addition, they are also limiting their participation in industry conferences and asking the team to hold meetings virtually.
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