Intel has decided to freeze hiring in the division responsible for PC desktop and laptop chips, as part of a series of cost-cutting measures, Reuters news report said.
Intel is pausing all hiring and placing all job requisitions on hold in its client computing group, according to the memo sent on Wednesday. The memo said that some hiring could resume in two weeks after the division re-evaluates priorities and that all current job offers in its systems will be honored.
Research firm IDC said shipments of PCs will fall 8.2 percent in 2022 to 321.2 million units. In addition, tablet shipments will drop 6.2 percent to 158 million units. IDC expects shipments to return to positive annual growth in 2023 and beyond. Meanwhile, tablets face a larger decline over the same period as competition from PCs as well as smartphones will continue to inhibit growth, leading to a -2.0 percent CAGR.
“We believe we are at the beginning of a long-term growth cycle across the semiconductor industry and we have the right strategy in place,” Intel said in a statement. “Increased focus and prioritization in our spending will help us weather macroeconomic uncertainty, execute on our strategy and meet our commitments to customers, shareholders, and employees.”
Intel earlier told investors to brace for lower gross margins than it has historically earned as it spends heavily to catch up to rivals like Taiwan Semiconductor Manufacturing (TSMC) whose manufacturing technology has overtaken Intel’s.
Intel’s client computing group is its largest by sales, generating $9.3 billion of its $18.4 billion in revenue in its most recent quarter. Intel’s desktop and laptop chips face increased competition from Advanced Micro Devices (AMD), and the division lost Apple as a customer after Apple started using it own custom-designed chips.
The memo sent on Wednesday also outlined other cost-cutting measures such as cancelling some travel for the group immediately, limiting participation in industry conferences and instructions to hold group meetings virtually when possible.
The hiring freeze does not appear to affect all of Intel. In a memo sent to all employees on Tuesday, Intel CEO Pat Gelsinger said the company would “slow” its hiring and would onboard 23,000 recently hired employees over the next 90 days. Intel had 121,000 employees at the end of 2021, the report said.