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The PC slowdown is beginning to bite chipmakers. Intel Corporation INTC is reportedly eyeing massive job cuts to tide over the current malaise.
What Happened: Intel plans to announce a major headcount reduction, running into thousands, as early as this month, reported Bloomberg, citing people with knowledge of the matter. The announcement could come around the release of the chipmaker’s third-quarter results on Oct. 27, the report said. Divisions, including sales and marketing, will likely see about 20% of the jobs being eliminated, added the report.
The company’s headcount stood at 113,700 as of July. Intel did not immediately respond to Benzinga‘s request for comment.
See Also: Best Semiconductor Stocks
Why It’s Important: A preliminary report released by Gartner late on Monday showed that global semiconductor shipments fell 19.5% year-over-year, marking the steepest fall since the firm began tracking the PC market in the mid-1990s.
Intel’s peer Advanced Micro Devices Inc. AMD warned last week of third-quarter revenue and gross margin shortfall, citing weakness in the PC market.
To make matters worse, chip stocks face a geopolitical risk as the U.S. has opted to impose license restrictions on the export of powerful chips to China, one of their key markets.
For Intel, the predicament could be worse, given it has been lately ceding market share to rivals such as AMD, primarily due to product missteps and execution issues. CEO Pat Gelsinger sounded out at the second-quarter earnings call in July that the company would undertake steps to improve floundering margins in the second half of the year.
Price Action: Intel closed Tuesday’s session down 0.63% at $25.04, according to Benzinga Pro data.
Read Next: How to Buy Intel (INTC) Stock
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Image and article originally from www.benzinga.com. Read the original article here.