Intel’s Shares Rise After News of Massive Layoffs
Tuesday saw a rise in the price of Intel Corporation (INTC) shares. This occurred after a report published by the chipmaker about shedding thousands of workers. In the following weeks, this is predicted to occur. The size reduction is a reaction to the steady drop in consumer demand for personal computers.
Intel Is Said to Be Considering a Worldwide Workforce Reduction
Bloomberg released a report on Tuesday night. The report claims that the chipmaker Intel intends to decrease its global headcount overall. The information also includes most of the job cuts anticipated for its marketing and sales divisions.
Bloomberg reports that the company will soon announce its restructuring strategies and financial results. The upcoming reports, covering the third quarter, are expected to go public on October 27.
On July 29, Intel revised its full-year sales forecast downward. The cut was between $65 Billion and $68 Billion. It followed second-quarter profits that weren’t as strong as anticipated. Considering the issues mentioned, this was regarded as a fair process.
Weakened demand, supply-chain disruptions, and inflationary excess are the problems. The problems discussed above still cripple consumer demand for personal computers.
Projections For the Current Quarter
According to Intel, the company’s sales for the current quarter have been predicted. The estimated amount will be between $15 and $16 billion.
Intel lowered the chipmaker’s price objective by $13 to $32 per share. Wells Fargo analysts issued warnings in response to Intel’s action. The analysts caution that continuing share price pressure would result from growing worries about year-over-year revenue decreases in data centers in 2023.
Additionally, Intel’s data center processor business is under pressure. The firm also engages in the semiconductor industry for data centers.
The brokerage company predicted that Intel would have to write down some of its excessive inventories. After its second quarter, Intel’s inventory levels were expected to be worth $12.2 billion. This would be akin to the price reductions rivals Advanced Micro Devices (AMD), and Nvidia (NVDA) achieved (AMD).
The price of Intel shares rose by 0.80% during pre-market trading. This suggests a share price of $25.24 at the opening bell. Despite this rise, the firm is still down more than 50% for the year.
By manufacturing semiconductor chips, Intel is the business that makes the most significant revenue. One of the businesses that created the x86 instruction sets was this one. The bulk of modern personal computers use instruction sets (PCs). Intel provides microprocessors to companies that make computers.
Lenovo, Acer, HP, Dell, and HP are a few manufacturers of this kind. Additionally, Intel makes integrated circuits, network interface controllers, and motherboard chipsets. Along with other computer and communication-related products, Intel also makes graphics chips, flash memory, embedded CPUs, and other components.