I think this is the first major layoff announcement at a big, established tech firm I've heard this year that is anywhere near this size. I mean, there have been loads of "couple hundred" employee layoffs, and certainly a lot of hiring slowdown/freezes, but again, haven't seen anything else near this big, and the layoffs previously seem to have been concentrated in unprofitable VC-funded companies. I know Tesla laid off a couple thousand people this summer, that's the closest thing that comes to mind.
Intel certainly has its own unique challenges, but even, for example, AMD had been doing pretty great up until this year, and they also just announced a big shortfall for their 3rd quarter results. Just wondering if this is really the tip of the iceberg for a true, broad retrenchment in tech, after the past 9 months of "Is a recession coming? Is a recession coming?"
Peloton laid off over 4000. Snap 1280 (which is 20% of the company,) Shopify 1000 (10%.) Groupon laid off 15%. Salesforce, 1000. Microsoft 1800. Carvana (while not "big established" it's still a lot of people) laid off 2500. Tencent laying off 5500. Alibaba: 9500, ByteDance: 1000, Zillow 2300.
This definitely isn't really the first major layoff announcement.
Outside of big tech: Credit Suisse laying off 5000, Ford 8000, Telefonica 2700. Societe General 3700
A bunch more, but these are the one measured in thousands or otherwise a significant percentage of a company's workforce.
(By the way, not arguing with you, my point is that this isn't surprising, the writing has been on the wall for the past year, so an Intel layoff isn't a bellwether for things getting bad -- it's a lagging indicator of things already being bad.
I don't know a lot of the details, but everything I've heard over the last couple of years indicated that AMD was absolutely crushing Intel.
A recent laptop I purchased, as well as the last desktop I put together (~2 years ago) each have Ryzen chips. I forget the details but in addition to performance issues, didn't Intel CPUs also have some major security vulnerabilities? And was it that they were related to instruction-level performance optimizations that, when disabled to address the security vulnerabilities, led to even worse performance?
So if AMD isn't doing great at the moment either, I can't imagine how hard Intel has been hit. I don't know anyone who is buying or recommending Intel CPUs at the moment.
I am not sure if Intel counts though. They have had challenges for the last several years during the bull market, which they failed to address, now they are taking advantage of the bear market to cull numbers. If we see someone who did not have these very visible weaknesses cutting numbers that would be a sign, not Intel. Though I agree Intel is huge and them laying off people still is a big deal.
I’ve seen a whole lot of stories like this at larger and larger companies. There was one like it about Facebook yesterday. They’re shorting their own stock [predictions] and adding employment insecurity to reinforce that. Big tech companies would love to benefit from a less competitive hiring landscape and the “recession?” narrative fits that well.
Too bad, and so sad, that they’ll be just as eager for talent when talent inevitably moves on and finds they’re happier where they landed when they were being used as stock price pawns.
Anecdata here but: literally every single dev I talk to on a regular basis has told me their company has laid off a sizable amount of staff in the last 3 months. Every single one.
Intel has the legend of a corporate turnaround after a huge layoff in its history.
I'm not sure if I can take this as a harbinger of things to come, and I'm saying this while generally being pessimistic of the economy, I think Intel is a deeply troubled business and some deep layoffs were long time coming because Intel was spread real thin across so many businesses.
> Microsoft ignoring AMD in their latest Surface lineup is a hint for the people looking for answers
I think the entire new surface line-up is a giant conspiracy.
The Surface Pro 9 5G has a Qualcomm 8cx Gen 3 with some tweaks called the SQ3. It does not match the performance of 12 Gen intel in a 15w power envelope, which is important because the Surface Pro 9 non-5G (intel) uses an i5-1235u, a 15w chip. But the last Gen, the pro 8 used a 28w 11th gen part. This means that the y/y perfromance is actually about the same (but better power/heat). If they used a matching 28w CPU it would have been a much bigger jump comapred to the ARM SQ3 5G.
But then, it gets WAY weirder.
The new (FOUR THOUNSDAND DOLLAR) Surface Studio 2+ ? 11th gen laptop CPU (11370H)...which is as fast as SQ3 will be.
Surface Laptop 5? Exact same specs as Surface Pro 8.
Casual reminder that the now two year old Apple M1 still smokes every single chip I just mentioned, all in a fanless iPad Air. The would-be Surface Laptop AMD Ryzen 6800U would be right on par with M1...which would make that SQ3 look like a bad deal.
That’s always the problem. An R&D group I worked for laid off developers but no managers, which lead to more layoffs because overhead went up, which mean rates went up, which meant more consultants came in instead.
Really at least a fifth of your layoff should be managers. If you lay off about six reports, that’s one less manager you need. So 1/7. If you lay off six managers, that’s one skip level you don’t need. 1 + 6 + 36 = 43. Go to three levels and that’s 1 + 6 + 36 + 216 = 259, or 43 / 259 or about 1/6.
But if you want to keep production capacity, you should move to slightly more reports per manager, not maintain steady state. Just to keep the math simple, if you had 216 developers reporting to an organization of 43 managers, if you went to 7 reports per manager you need 31 line managers, not 36, which is a 2% RIF without losing a single producer. Or if you do both you get about 1/5th of laid off people as managers if you lay off less than half your developers.
Edit: fractions and ratios are not interchangeable, bad math.
Pfft, as bad as the managers are at Intel, don't try to pretend that they have top tier talent (in SW) when they are paying on average about half of what a FAANG pays.
When I was there, they called Intel "Great place to leetcode" (a corruption of Intel claiming they are a "great place to work" everywhere)
Intel is known for good WLB and quiet quitting because the non technical managers didn't have a clue about what was actually being done on their own team. It's easy for engineers to BS these kinds of people, and this was the norm since any passion for SW was killed by working there long term...
I’ve been through two layoffs at tech companies - one of 14,000 and one of 15,000.
One touched a lot of teams including my own. The second was mostly smoke and mirrors - they took multiple factories and supply chain employees and sold them or outsourced them to a company that picked up the payroll for those employees. Only a handful of roles were truly culled.
The announcement of the layoffs was theatre for Wall Street.
It's important that Wall Street is not just some people but the owners of the company. So it's a signal to the owners that their money will be better spent.
Just saying Wall Street sounds very dismissive of the obligations that management has to the owners.
Isn't this just a culmination of nearly a decade of unforced errors and mismanaged strategy? I'm a complete outsider but I see a couple of fundamental huge misses by Intel over the past 10 or so years:
1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch.
2) Missed too many ticks and replaced them with tocks. Fell far behind because of ridiculous tilt-at-windmill folly around Itanium and other architectural decisions that absolutely didn't pay off. Ended up taking way too long to get further down on process size.
3) Lost their competitive edge so much that Apple finally realized they can do it better and suffer the transitional costs of building a middleware layer to translate off of x86. Apple's fully committed to that, so Intel doesn't just lose the "no one is using a PC anymore" market, they're also losing the "those people who DO use home computers which happen to be Apples" market.
It's absolutely incredible to watch these formerly phenomenally innovative companies falter at that very core competency of staying cutting edge but we see it happen over and over again.
This blog post[0] explains it pretty well: "Fewer and fewer computer users think their computer is too slow." And therefore they only buy new computer if the current one breaks. "This happens less and less often. Even most disk drives, which are about the most mechanical part of a computer system, come with at least a 3 year warranty."
"It means that computer purchasing decisions are no longer made based on price/performance or just performance, like in the dark ages. Now, when somebody decides to buy a new computer it will be price alone, or maybe price and service, that determines which computer to buy."
It's one of a few large companies with that distinction.
Shares now offer a (relatively) regal 5.3% dividend yield and a price/earnings ratio just above 5. Of course, as profits dwindle, both metrics will be recalibrated downward.
This seems relevant because during the late 1990s Intel was allegedly the company whose shares one bought and never sold. I could name a couple of those whose positions today are argued to be equally ironclad.
I asked an Intel chip designer more than 10 years ago why they were not prioritizing mobile chips. He didn't have a good answer. It has been obvious for so long that everything was moving to phones, tablets, etc. The fact that Intel has no foot at all in that door is astonishing to me.
... and in the context of the recently-passed CHIPS Act...
I wish they'd be more of an engineering-driven bottom-up company. IMO there's a huge company culture to contend with that is primarily top-down. So much scar tissue in the company prevents changing things for the better. So many good people capable of making these sorts of changes get burned out and leave the company. Intel's compensation compared to FAANG certainly helps to push people out of the company.
Intel invested a lot into EUV thus enabling ASML to do it, but did not take advantage of the technology because they thought not to take "risks" even though they could have easily set up different teams invested into different technologies and picked the best one. Business people running the company was a failed experiment clearly.
Good thing Pat is back and now going with EUV to remain competitive.
Intel just received money from the US government and they swiftly started laying off American workers. The money is supposed to be for the new Ohio plant and 3000 jobs, but now we’re losing thousands of jobs up front?
Gamers (and non-Mac high-end desktop performance users) would seem to be a pretty small slice of the pie these days. I have a high-end current M1 laptop but I do a lot of my work on a couple of 7 year old Intel-based desktop/laptop machines which are perfectly fine although they're about to go out of OS support. (Though I'll probably use them for a few more years anyway.)
I remember when you wanted a new PC with every tick of the processor cycle. These days, for most people, who cares?
Can't recall where I heard this recently, a podcast I think, there was a CS professor talking about undergrad introductory programming classes. He said that about 5 years back his students stopped coming in with experience using a PC because they'd only been using phones/tablets. So the prof said it was kind of like going back ~25 years when not a lot of incoming students had PC experience either.
While Intel has had it's own shortcomings, the PC market is cratering [1] and Intel among others is very exposed. I was very curious about the very steep discounts on Apple Macbooks recently and thought it was due to latest versions coming out in October; but looks like there is a massive reset in shipments after the massive boom during the pandemic.
I remember 10 years when I get interested in building a computer and the general consensus was that AMDs bulldozer debacle had them on life support.
Intel's dominance was practically guaranteed for five years, I knew Zen was going to be successful but I was surprised to see that they've successfully flipped the script and Intel is in a bind.
This is going to become the norm for a while - many of these massive tech companies have a lot of dead weight, and these current conditions allow for the shedding of such weight. It will be painful, and not great for many - but at the end of the day we should emerge a more agile, stable, and innovative society. At least that is the hope. The age of exuberance is gone, time to put our heads together, and work hard again.
I worked at Intel and it kicked off my career. I believe putting a Cfo in charge of a company will lead to this. I wonder if apple will ever end up in the same situation
[+] [-] neonate|3 years ago|reply
[+] [-] hn_throwaway_99|3 years ago|reply
Intel certainly has its own unique challenges, but even, for example, AMD had been doing pretty great up until this year, and they also just announced a big shortfall for their 3rd quarter results. Just wondering if this is really the tip of the iceberg for a true, broad retrenchment in tech, after the past 9 months of "Is a recession coming? Is a recession coming?"
[+] [-] AareyBaba|3 years ago|reply
[+] [-] briandear|3 years ago|reply
Within the past 12 months:
Peloton laid off over 4000. Snap 1280 (which is 20% of the company,) Shopify 1000 (10%.) Groupon laid off 15%. Salesforce, 1000. Microsoft 1800. Carvana (while not "big established" it's still a lot of people) laid off 2500. Tencent laying off 5500. Alibaba: 9500, ByteDance: 1000, Zillow 2300.
This definitely isn't really the first major layoff announcement.
Outside of big tech: Credit Suisse laying off 5000, Ford 8000, Telefonica 2700. Societe General 3700
A bunch more, but these are the one measured in thousands or otherwise a significant percentage of a company's workforce.
(By the way, not arguing with you, my point is that this isn't surprising, the writing has been on the wall for the past year, so an Intel layoff isn't a bellwether for things getting bad -- it's a lagging indicator of things already being bad.
[+] [-] gspencley|3 years ago|reply
A recent laptop I purchased, as well as the last desktop I put together (~2 years ago) each have Ryzen chips. I forget the details but in addition to performance issues, didn't Intel CPUs also have some major security vulnerabilities? And was it that they were related to instruction-level performance optimizations that, when disabled to address the security vulnerabilities, led to even worse performance?
So if AMD isn't doing great at the moment either, I can't imagine how hard Intel has been hit. I don't know anyone who is buying or recommending Intel CPUs at the moment.
[+] [-] yalogin|3 years ago|reply
[+] [-] eyelidlessness|3 years ago|reply
Too bad, and so sad, that they’ll be just as eager for talent when talent inevitably moves on and finds they’re happier where they landed when they were being used as stock price pawns.
[+] [-] shakezula|3 years ago|reply
[+] [-] lxgr|3 years ago|reply
[+] [-] systemvoltage|3 years ago|reply
[+] [-] PartiallyTyped|3 years ago|reply
[+] [-] faeriechangling|3 years ago|reply
I'm not sure if I can take this as a harbinger of things to come, and I'm saying this while generally being pessimistic of the economy, I think Intel is a deeply troubled business and some deep layoffs were long time coming because Intel was spread real thin across so many businesses.
[+] [-] petra|3 years ago|reply
[+] [-] Kukumber|3 years ago|reply
Congrats to Apple and AMD for having done better
Microsoft ignoring AMD in their latest Surface lineup is a hint for the people looking for answers
[+] [-] agloeregrets|3 years ago|reply
I think the entire new surface line-up is a giant conspiracy.
The Surface Pro 9 5G has a Qualcomm 8cx Gen 3 with some tweaks called the SQ3. It does not match the performance of 12 Gen intel in a 15w power envelope, which is important because the Surface Pro 9 non-5G (intel) uses an i5-1235u, a 15w chip. But the last Gen, the pro 8 used a 28w 11th gen part. This means that the y/y perfromance is actually about the same (but better power/heat). If they used a matching 28w CPU it would have been a much bigger jump comapred to the ARM SQ3 5G.
But then, it gets WAY weirder.
The new (FOUR THOUNSDAND DOLLAR) Surface Studio 2+ ? 11th gen laptop CPU (11370H)...which is as fast as SQ3 will be.
Surface Laptop 5? Exact same specs as Surface Pro 8.
Casual reminder that the now two year old Apple M1 still smokes every single chip I just mentioned, all in a fanless iPad Air. The would-be Surface Laptop AMD Ryzen 6800U would be right on par with M1...which would make that SQ3 look like a bad deal.
Microsoft is sandbagging the lineup for ARM.
[+] [-] hinkley|3 years ago|reply
Really at least a fifth of your layoff should be managers. If you lay off about six reports, that’s one less manager you need. So 1/7. If you lay off six managers, that’s one skip level you don’t need. 1 + 6 + 36 = 43. Go to three levels and that’s 1 + 6 + 36 + 216 = 259, or 43 / 259 or about 1/6.
But if you want to keep production capacity, you should move to slightly more reports per manager, not maintain steady state. Just to keep the math simple, if you had 216 developers reporting to an organization of 43 managers, if you went to 7 reports per manager you need 31 line managers, not 36, which is a 2% RIF without losing a single producer. Or if you do both you get about 1/5th of laid off people as managers if you lay off less than half your developers.
Edit: fractions and ratios are not interchangeable, bad math.
[+] [-] chao-|3 years ago|reply
For those of us who are bad at subtext, could you elaborate further? What are the questions that this is the answer to?
[+] [-] Der_Einzige|3 years ago|reply
When I was there, they called Intel "Great place to leetcode" (a corruption of Intel claiming they are a "great place to work" everywhere)
Intel is known for good WLB and quiet quitting because the non technical managers didn't have a clue about what was actually being done on their own team. It's easy for engineers to BS these kinds of people, and this was the norm since any passion for SW was killed by working there long term...
[+] [-] pojzon|3 years ago|reply
Far too long managers are not taking responsibility for their bad decisions - not only business decisions but also simple feedback disregard.
„Look at what happened to Intel thats what happens if you let your managers loose”
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] me_me_me|3 years ago|reply
Yeah, its always them that get cut \s
[+] [-] mensetmanusman|3 years ago|reply
[+] [-] QuarterRoy|3 years ago|reply
One touched a lot of teams including my own. The second was mostly smoke and mirrors - they took multiple factories and supply chain employees and sold them or outsourced them to a company that picked up the payroll for those employees. Only a handful of roles were truly culled.
The announcement of the layoffs was theatre for Wall Street.
[+] [-] dx034|3 years ago|reply
Just saying Wall Street sounds very dismissive of the obligations that management has to the owners.
[+] [-] mattfrommars|3 years ago|reply
[+] [-] disillusioned|3 years ago|reply
1) Completely missed the boat on mobile. Their ARM-competitive chips (Atom, etc.)... weren't. Missed on every measure from power to performance. Let Qualcomm and Samsung eat their lunch.
2) Missed too many ticks and replaced them with tocks. Fell far behind because of ridiculous tilt-at-windmill folly around Itanium and other architectural decisions that absolutely didn't pay off. Ended up taking way too long to get further down on process size.
3) Lost their competitive edge so much that Apple finally realized they can do it better and suffer the transitional costs of building a middleware layer to translate off of x86. Apple's fully committed to that, so Intel doesn't just lose the "no one is using a PC anymore" market, they're also losing the "those people who DO use home computers which happen to be Apples" market.
It's absolutely incredible to watch these formerly phenomenally innovative companies falter at that very core competency of staying cutting edge but we see it happen over and over again.
[+] [-] mrkramer|3 years ago|reply
"It means that computer purchasing decisions are no longer made based on price/performance or just performance, like in the dark ages. Now, when somebody decides to buy a new computer it will be price alone, or maybe price and service, that determines which computer to buy."
[0] https://jlforrest.wordpress.com/2015/12/18/the-forrest-curve...
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] SevenNation|3 years ago|reply
https://www.tradingview.com/chart/?symbol=INTC
It's one of a few large companies with that distinction.
Shares now offer a (relatively) regal 5.3% dividend yield and a price/earnings ratio just above 5. Of course, as profits dwindle, both metrics will be recalibrated downward.
This seems relevant because during the late 1990s Intel was allegedly the company whose shares one bought and never sold. I could name a couple of those whose positions today are argued to be equally ironclad.
[+] [-] JumpCrisscross|3 years ago|reply
As you observe, this is true only if one ignores dividends, which are a material component of total returns for a mature company like Intel.
> during the late 1990s Intel was allegedly the company whose shares one bought and never sold
This has never been true for any public company. And it’s driven by investor style more than company fundamentals.
[+] [-] 01100011|3 years ago|reply
https://stockcharts.com/freecharts/perf.php?INTC
The picture is better, but not great. Folks who bought at the peak of the bubble would have needed to hold for about 18 years to break even.
[+] [-] skippyboxedhero|3 years ago|reply
Because the rest went bankrupt.
[+] [-] astrange|3 years ago|reply
And your dividend % is before tax, so compare to tax-free bonds.
[+] [-] nostromo|3 years ago|reply
US treasuries are nearing 4% and are risk free.
[+] [-] bell-cot|3 years ago|reply
Is it just me, or do some other folks also smell "corporate bloat, which better management would not have allowed to happen"?
[+] [-] b2hhaQ|3 years ago|reply
This article extrapolates that out to "All divisions will cut 20% of staff".
It's unfortunate for a lot of people regardless, but the report seems (for now) to be exaggerated.
[+] [-] pengaru|3 years ago|reply
Maybe if Apple's products were still "Intel Inside" Intel wouldn't be in this position.
[+] [-] irrational|3 years ago|reply
[+] [-] chrisseaton|3 years ago|reply
[+] [-] mattst88|3 years ago|reply
I have little faith in Intel's management. They apparently plan to continue increasing their dividend payouts, while cutting back on investment in fabs according to https://semianalysis.substack.com/p/intel-cuts-fab-buildout-...
... and in the context of the recently-passed CHIPS Act...
I wish they'd be more of an engineering-driven bottom-up company. IMO there's a huge company culture to contend with that is primarily top-down. So much scar tissue in the company prevents changing things for the better. So many good people capable of making these sorts of changes get burned out and leave the company. Intel's compensation compared to FAANG certainly helps to push people out of the company.
[+] [-] excsn|3 years ago|reply
Good thing Pat is back and now going with EUV to remain competitive.
[+] [-] twobitshifter|3 years ago|reply
[+] [-] ghaff|3 years ago|reply
Gamers (and non-Mac high-end desktop performance users) would seem to be a pretty small slice of the pie these days. I have a high-end current M1 laptop but I do a lot of my work on a couple of 7 year old Intel-based desktop/laptop machines which are perfectly fine although they're about to go out of OS support. (Though I'll probably use them for a few more years anyway.)
I remember when you wanted a new PC with every tick of the processor cycle. These days, for most people, who cares?
[+] [-] UncleOxidant|3 years ago|reply
[+] [-] npalli|3 years ago|reply
[1] https://www.gartner.com/en/newsroom/press-releases/2022-10-1...
[+] [-] Aaronstotle|3 years ago|reply
Intel's dominance was practically guaranteed for five years, I knew Zen was going to be successful but I was surprised to see that they've successfully flipped the script and Intel is in a bind.
[+] [-] theropost|3 years ago|reply
[+] [-] synthetigram|3 years ago|reply
How to tell an article is written by a hedge fund shorting the company.
[+] [-] alexnewman|3 years ago|reply
[+] [-] PaulHoule|3 years ago|reply