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Intel has this week revealed that it is laying off over 15,000 workers, saying it will cut 15% of its workforce in efforts to streamline the business.
The company says the cuts are part of a drive to save $10 billion in costs by 2025, which will be achieved through various streamlining measures and spending reductions. R&D and marketing spend will be cut by more than a billion dollars through to 2026, while capex this year will be reduced by 20%.
Announcing the cuts alongside the company’s latest financial results, Intel CEO Pat Gelsinger described the decision as “incredibly hard”, saying the company is “making some of the most consequential changes in our company’s history”.
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected,” read the memo.
Intel has been struggling to compete with rivals in the AI chip space, such as AMD and Nvidia, while also losing ground to the likes of Qualcomm and Apple, which rely on chips from Arm.
In its most recent quarterly results, Intel recorded a loss of $1.6 billion, compounding the $437 million it lost in the quarter before that. The losses can primarily be attributed to the company’s chipmaking Foundry business.
“Weaker spending across consumer and enterprise markets, especially in China, and continued focus on AI server investments in the cloud have reduced our [total addressable market] expectations for 2024,” explained CFO David Zinsner, adding that “customer inventory levels are elevated”.
Intel’s own foray into AI chips, Lunar Lake, is set to be released this September.
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Also in the news:
Australian Government and AWS Collaborate to Strengthen country’s Cybersecurity
Solving congestion challenges in FTTP deployment
Vodafone Invests £120m in AI Chatbot ‘SuperTOBi’
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This Industry Viewpoint was authored by Robert Bianco, Chief Commercial Officer of HYLAN
The data center construction landscape is shifting at an unprecedented pace, driven by the integration of artificial intelligence (AI) and its profound implications. AI integration is fundamentally reshaping the industry; necessitating expanded infrastructure and advanced design specifications to meet growing computational needs. … [visit site to read more]
Indian authorities have hit leading IT outsourcer Infosys with a US$3.9 billion tax demand – and some news reports suggest the pursuit of alleged unpaid taxes will soon target other big names.
According to the UK’s Financial Times the demand came as the Indian IT industry was showing early signs of recovery following a worldwide tech spending slowdown. Indeed, Infosys and other relevant players, like Tata Consultancy Services, posted buoyant quarterly earnings earlier in July.
Infosys has apparently been issued notices for payment of goods and services tax (GST) by agencies in its home state of Karnataka and from the national Directorate General of GST Intelligence for the period of July 2017 to March 2022.
The tax demand relates to “expenses incurred by overseas branch offices”, says Infosys, whose headquarters, like those of a number of IT companies, are in the Karnataka capital Bengaluru. It does not agree that GST applies on these expenses.
Reuters, however, suggests Indian authorities may soon issue notices to more major IT services firms in an investigation of alleged tax evasion related to work done by their overseas offices. Reuters says these overseas offices carry out projects for Indian IT firms and provide services to international clients, among other functions.
This isn’t just about IT, however. In the last year, India’s GST department has sent more than 1,000 notices to companies, including Life Insurance Corporation of India, Dr Reddy’s Laboratories and Ultratech Cement.
Tax authorities have also issued notices to online gaming companies demanding a total of about 1 trillion rupees (about US$12 billion) in taxes that they have allegedly evaded. Many companies have challenged these demands in tribunals and courts.
This isn’t the first backdated tax claim from Indian officials, as Vodafone, a company that has successfully fought retrospective taxes, might point out.
As we reported at the end of the 14-year dispute, the Indian government decided to nullify its own tax demands against Vodafone, apparently to improve perceptions of its stance on taxation in order to encourage foreign investment into the market. But could the recent drive to pursue alleged unpaid taxes undermine this effort?
Three global expansion projects and one domestic FTTx buildout: … [visit site to read more]
Today, the UK Infrastructure Bank (UKIB) has announced a £250 million debt package for full fibre network provider Quickline Communications.
The funding, which takes the form of a £125 million term loan, a £100 million debt guarantee, and a £25 million term loan provided by NatWest, will reportedly allow Quickline to expand its network to 190,000 additional locations.
“This financial backing marks a significant endorsement of Quickline’s robust business model, our mission to connect the unconnected and to help regenerate our northern rural communities. Furthermore, it demonstrates UKIB’s confidence in our strategic vision and operational capabilities. It also reflects a broader investor interest in tackling the digital divide that exists today and supporting sustainable and impactful business initiatives,” said Sean Royce, CEO at Quickline.
“This partnership will support our deployment of vital connectivity infrastructure, bringing essential digital services to even more rural communities in dire need of improved broadband and kickstart economic growth across rural Yorkshire and Lincolnshire.”
Quickline has already won four Project Gigabit contracts from the UK government, which combined will see it cover 170,000 homes and businesses with full fibre.
The altnet is currently aiming to expand its network to 500,000 premises across Yorkshire and Lincolnshire by 2025.
This investment marks the latest in a string of altnet investments from the UKIB over the past month, having also committed £35 million to Cornish altnet Wildanet and £150 million to Hyperoptic.
Join the operators in discussion at this year’s Connected Britain, the UK’s largest digital economy event
Also in the news:
Australian Government and AWS Collaborate to Strengthen country’s Cybersecurity
Solving congestion challenges in FTTP deployment
Vodafone Invests £120m in AI Chatbot ‘SuperTOBi’
