Intel boss Patrick Gelsinger has claimed that thousands of "friends" that his company is firing "view it as the right thing" - even though some have given the firm up to four decades of their working lives.
Earlier this month, Intel announced that it was slashing 15,000 jobs, suspending dividends, and cutting capex by 20% in a "hard but necessary" decision made after posting a painful $1.6 billion loss in its second quarter.
Speaking at Deutsche Bank's 2024 Technology Conference, Gelsinger admitted that has been "a difficult few weeks" spent "working hard to address the issues and at earnings we were determined to lay out a clear view, right, of where we were, but also some of the next steps that we needed to address for the next phase of our strategy."
"And obviously, the market didn't respond positively," he added. "We understand that, and we're taking seriously what the market's telling us, and hearing that clearly. But we're also staying very focused on delivering and executing on the large number of the things that we laid out."
That message couldn't have been clearer. After posting its last results, Intel suffered its worst share price plunge in more than a decade. Its stock is now shuffling along at just over $20.
At the Deutsche Bank conference, Gelsinger said the "cost reductions" Intel was making would help it to "operate efficiently with nimbleness, with urgency".
"As you think about the turnaround story for Intel, I'd really like to say that we've now begun phase two," he continued. "You know, in phase one of the transformation was this rebuilding of the company and being able to get back to process and product leadership and laying out our IDM 2.0 strategy. And I think about that as the most significant rebuilding of the company since the memory to microprocessor transition."
This will involve getting "back to process leadership". It recently released a process design kit (PDK ) for Intel 18A, a manufacturing process used to create its Panther Lake and Clearwater Forest chips that are expected to be released next year.
Roughly a dozen customers are "actively engaged with us" around that PDK, the Intel boss revealed.
How will Intel recover from the share price drop?
Gelsinger also annnounced "a tripling of our deal pipeline in advanced packaging" which "continues to be the on-ramp for many of our foundry customers."
Next week, it will release Lunar Lake, which the CEO described as "the most compelling AIPC product ever" which will "dispel some of the myths around the battery life of X86 versus ARM in a very declarative way."
He continued: "Phase 2 has to move into now becoming efficient, implementing cost actions. And I realized when I took the job that we needed to take these actions.
"However, you couldn't go to the TD and product teams and say: 'I need you to fundamentally reduce cost and get back to leadership simultaneously.' And we chose get back to leadership first. And now we're focused on getting efficient."
And what does efficiency mean? A whole heap of job losses.
"These are friends," the CEO declared. "These are people that I've worked with for many years. And it's challenging to see 30 and 40-year veterans of the company [lose their jobs] but they view it as the right thing in this phase. We're well underway: site reduction, portfolio reductions to build an efficient, competitive Intel.
"And we respect some of the scepticism that we've received from the market. I, my leadership team, the company, we believe we're up for the challenge. We're committed to do it. And as we go from memory to microprocessors to IDM 2.0, fab and fabless businesses, we're well underway to deliver what we said we would."
Discussing "the 15,000", he then asked: "Is that enough? Is that not enough?"
The CEO added: "The majority of those 15,000 actions are already identified. So, we feel good that we'll get those finished."
Since announcing the redundancies and suffering a stock market savaging, the share price of Intel has recovered ever-so-slightly to nudge just above $2.20.
Have you lost your job at Intel? Get in touch with jasper@thestack.technology to talk about it in confidence.
