Intel Corporation is implementing a wider corporate restructuring plan following a reported $7 billion financial loss from the previous fiscal year. This significant change is a result of a considerable financial deficit that has significantly impacted the company’s profit margins.
The restructuring is affecting over 50 employees, with changes in job roles, departments, and an unfortunate few positions being eliminated. These changes are designed to enhance the company’s efficiency and sustain it in the long run.
CEO Pat Gelsinger has a goal to reduce the company’s total costs by approximately $10 billion by 2025. High operational losses are anticipated in 2024, subsequent to the aggressive launch of five technology nodes in just four years.
The restructuring plan also involves dividing the company into two parts: Intel Foundry and Intel Products.
Intel’s restructuring plan after massive loss
This move is expected to streamline profit and margin distribution. Even after suffering from significant losses last year, Intel Foundry could turn around its business with this new approach, potentially discovering up to $100 billion in hidden value.
The primary aim of the restructuring is to increase operational efficiency and cost-effectiveness while stimulating growth in the foundry. The plan also includes maintaining competition with key players like TSMC and Samsung in the chip market, with an aim of achieving a stable balance sheet to ensure a sustainable future.
Previously in the year, Nvidia selected Intel to manufacture leading-edge chips, an agreement that is expected to surpass 300,000 H100 GPUs per month. By the year 2030, Intel is aiming to attain a gross margin of 40% and an operational margin of 30% for its foundry enterprise.
