back to article Gelsinger takes ax to Intel after chip sales slump, profit nosedives

Intel plans to lay off a "meaningful number" of employees and dump some products as part of a massive reduction in spending the chipmaker expects will reach up to $10 billion annually by 2025. The American semiconductor giant said the spending cuts were necessary due to what CEO Pat Gelsinger said were "worsening economic …

  1. Lordrobot

    Did Born Again Pat take a cut?

    When you go Xenophobe for your Trump BIDEN protectionist BASE, Asia stops buying your BBQ.

    Oh But but but, just last week Born Again PAT was talking about all the pluses of a Biden boycott of selling US tech products. Pat claimed this was the rebalancing of the US supply chain. Meanwhile, INTEL is dogging it and now out comes the Born Again AX.

    Just remember when you get the AX at Intel... you always had OHIO!

    1. Sceptic Tank Silver badge
      WTF?

      Re: Did Born Again Pat take a cut?

      But you also get the BX, CX, and DX at Intel. And you always had AH/AL, BH/BL, etc.

      (The rest of the writing I could not quite follow).

      1. andrewj

        Re: Did Born Again Pat take a cut?

        I think the poster is on a lot of RX.

    2. DS999 Silver badge

      Re: Did Born Again Pat take a cut?

      There seems to be an inverse correlation between the amount of randomly capitalized words or all cap words in a post/tweet/statement/etc. and its signal to noise ratio.

    3. Brewster's Angle Grinder Silver badge

      Re: Did Born Again Pat take a cut?

      Not a patch on AManFromMars.

  2. pimppetgaeghsr

    Seems reasonable, from what I gather from colleagues and online forums the culture is awful full of brown nosing managers that haven't updated their skillsets since Reagan was president.

    When your cash cow businesses slide and can't subsidise the crap then it is time to remove the crap. There are a million ways they could execute this poorly and wind up back where they started, but Intel will have to become one of the first big tech companies to actually rout out the problem or wind up just like another IBM. The FAANG companies will follow in about a decade of maturity if they are still around, but tech corporations just became like the corporations of old, they aren't fun innovative at all anymore.

    I am curious of whether or not a tech corporation this size has ever turned itself around and returned to growth

    1. imanidiot Silver badge

      The problem is that many of the products that Intel considers "crap" might not actually be (or have been) crap, but Intel (outside of CPUs) seems to have ADHD, always going for the next "Ooooohhhhhh, shiny!!!" which is royally pissing off potential customers and has long since soured the market on using Intel products. Couple that to Intel being extremely unhelpful if you're not a millions of units a year customer of their chips and you get the current situation where, outside of CPUs Intel basically has no market share. See the several debacles of Intel trying to get into embedded systems for instance.

    2. David Hicklin Bronze badge

      > corporation this size has ever turned itself around and returned to growth

      applies to all companies that get to big, inertia makes it very hard for the rudder to change the ships direction once it starts going wrong

    3. BOFH in Training

      I am curious of whether or not a tech corporation this size has ever turned itself around and returned to growth

      ----

      Apple maybe? But that depends if you consider Apple as tech or consumer goods or electronics or a design firm.

      1. pimppetgaeghsr

        At this stage they are doing all of the above.

    4. Bitsminer Silver badge

      I am curious of whether or not a tech corporation this size has ever turned itself around and returned to growth.

      GM, aka Government Motors. Both Canada and USA bailed out GM, Chrysler (as it was then known) and even threw a few dollars at Ford Motors.

      This was back in the late oughts (2009-ish).

      IIRC GM Canada went through a receivership process, what the US calls Chapter 11 Bankruptcy Protection (not, as often assumed, actual bankruptcy.)

      Both governments made money on the deals, but not by much.

      1. Yet Another Anonymous coward Silver badge

        And, in Canada at least, they shuttered the plant as soon as the terms of bailout expired

  3. Pascal Monett Silver badge
    Flame

    CEO Pat Gelsinger

    Was that a picture of him on stage ?

    Is there an unwritten rule that says that now, all CEOs on stage must dress like their teenage son ?

    Why isn't he wearing a suit ?

    He's the CEO of a company that brought in $79 billion in 2021.

    Steve Jobs is dead. Wear a suit.

    1. localzuk Silver badge

      Re: CEO Pat Gelsinger

      The world is slowly but surely moving away from an obsession with how people dress.

      Also, Intel HQ is in California. So, not the biggest suit-wearing area of the US.

  4. Stuart Castle Silver badge

    Not a surprise

    For one thing, both ARM and AMD *are* competing well with Intel. Take my PC. For the last 20 years, I've been a bit of an Intel fanboi, buying Intel every time I upgraded my CPU. But, I've always kept an eye on the competition, and in 2019, when I last upgraded my CPU, I look around and found that in terms of price per performance, the Ryzen 5 3600 beat the Intel Core i5. I wouldn't have gone for the 7 or 9 because I wouldn't get enough of an advantage from the extra power to justify the extra cost, IMO.

    I believe AMD still beat Intel in the price per performace ratings, although I haven't checked recently, so could very well be wrong.

    ARM isn't directly competing with Intel because they don't sell CPUs for PC Compatibles (although it *is* feasible to emulate an x86 on ARM). In fact, they don't sell CPUs at all, but they do licence their designs to companies who manufacture CPUs for phones, tablets and other devices. Phones and Tablets in particular *are* competing with the PC. This is a problem for intel because it means fewer PCs are being sold.

    The third problem is that companies have just spent a *lot* of money buying new equipment for working from home. While this made for very nice profits at the start of lockdown, that equipment isn't going to be replaced for years, which will hurt Intel's bottom line..

    1. Wade Burchette

      Re: Not a surprise

      The Intel i5's in the 12--- and 13--- generation beat AMD in price/performance. When you factor in total build cost, these i7 and i9's can also be cheaper than the Ryzen 7000. This is because both DDR5 and Ryzen 7000 motherboards are too expensive. Of course, as time goes on and manufacturing ramps up, those costs will fall significantly.

      When you factor in the price and the fact that Ryzen 7000X3D is coming soon, it is no wonder that AMD's current launch has been a dud compared to Intel's. I personally think AMD's decision to go all-in on DDR5 is better long-term even though it hurts short-term.

      1. Anonymous Coward
        Anonymous Coward

        Re: Not a surprise

        The new 13th generation desktop processors do look better than AMD's latest. But recent stories on El Reg have pointed out that most new PCs are laptops not desktops, and all PC shipments are down as everyone either upgraded to deal with the pandemic, or upgraded after the pandemic once replacements were available again. So the new chips may not provide a big boost here.

        The other area where Intel aren't doing as well is servers. Businesses may well be holding off on server purchases due to the looming recession, and AMD do have competitive products here as well. Again, it may not help Intel's bottom line much.

        Intel may just have to ride it out for the next few years until the next big wave of PC refreshes.

        1. Yet Another Anonymous coward Silver badge

          Re: Not a surprise

          PCs are irrelevant, even small servers are becoming irrelevant Intel used to be able to leverage it's monopoly on Xeon to keep the OEMs on board - now that the cloud companies can fab their own ARM chips times are not looking good.

    2. bazza Silver badge

      Re: Not a surprise

      ARM and AMD are indeed doing well against Intel.

      In particular, I feel that both are in a strong position should there be a downturn, AMD more so. They don't have massive fab capacity to fund through lean years. AMD can stop selling chips tomorrow, hunker down, and still be there when the market returns. By comparison, Intel still has massive fixed costs regardless, and it's "fab for hire" business model could go wrong if there's suddenly too much fab capacity in the world. Why would you go to Intel, if TSMC can make you a better chip, especially in a downturn?

  5. Fred Daggy Silver badge

    Did Executive compensation take a hit?

    Did Executive compensation take a hit? Because ... colour me surprised, staff are taking a hit.

    FWIW, there are only 5 rejuvenation plans in business:

    1 - First, cut staff. This is done in 100% of cases.

    2 - If the organisation is centralised, de-centralise (aka agility). However, if the business is already decentralised, centralise it.

    3 - Buy competitors.

    4 - Outsource core competencies until they are no longer yours or deliver any actual advantage.

    5 - Do NOT touch Executive compensation.

  6. TimMaher Silver badge
    Trollface

    “Drone entertainment unit”?

    I mean, do drones need entertaining?

    That is totally niche.

    Unless the drones are middle management.

    1. Yet Another Anonymous coward Silver badge

      Re: “Drone entertainment unit”?

      Do you really want mobs of dissafected bored drones hanging around on street corners ?

  7. Binraider Silver badge

    ARC in the firing line by any chance, before it even get's a chance to launch...?

    1. NLCSGRV

      I would be a pity if it is in the firing line. A competitor is badly needed to break up the nVidia/AMD duopoly.

  8. This post has been deleted by its author

  9. Anonymous Coward
    Anonymous Coward

    Pat must need a new Yacht.

    There are plenty of former Russian-owned ones going cheap at the moment.

    Sad that these numpties (C-level MBA idiots) think only in terms of the next quarter and not two years down the line especially when it takes years to develop a CPU chip.

    OTOH, Intel has made so many crass errors in the last 5+ years that they don't deserve to survive.

    PErhaps they should ask Elon to buy them out. After all, he has basically rescued Twitter... no make that only delayed its death.

  10. F. Frederick Skitty Silver badge

    What the fsck is an ax?

    1. Ken Hagan Gold badge

      Accprding to the OED, it is a legitimate spelling of "axe", common in North America and etymologically and phonologically superior to the alternative.

  11. Mr Anonymous

    Remind me again,

    How much CHIPS cash they are hoovering up?

  12. steviebuk Silver badge

    What's....

    ....Paul Daniels doing in the photo? Looking young.

  13. Anonymous Coward
    Anonymous Coward

    S&M could lose 20% of staff?

    Surely this should read, "S&M would retain 20% of staff"!

    Worked there until recently. Packed with unskilled, dead-wood no hopers who cling on to the company's history and their ridiculously high salary/benefits

    More focussed on showing all of their 50+ slides presentation than doing the real work needed to gain market share with solutions that users need

    Will be Nokia #2

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