Whatever goes up, must come down. This is a common law of the world but also applies to economic trends. Despite being a giant of a tech company, Intel is faced with the reality of having to lay off thousands of employees to keep operations afloat, according to a report by Bloomberg. We deep dive into the details here.

It has almost become common knowledge that the pandemic has changed the way we work forever. Work-from-home policies saw immense pandemic-driven growth in sales of personal computers or PCs, stringing along the demand for main components like chipsets and GPUs. Companies that produce these components have also hired en masse to accommodate this rising demand. However, as most of those who need setups have already built theirs and others transition into hybrid arrangements, demand naturally slows down.

Intel reports 2022 sales figures substantially ($11bn, to be exact) below forecasted figures. The company is trying to run more efficiently and leaner to use up less resources and achieve similar results. “We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year,” Chief Executive Officer Pat Gelsinger said, earlier in 2022.

As such, these Intel lay off procedures are expected outcomes of a financially-underwhelming performance in Q3 of 2022. As of July this year, the chipmaker was estimated to have around 113,700 employees. With lay off estimates of around 20%, that number comes to approximately 22,740 workers who will become unemployed as a result of this endeavor. That’s even more than the company’s last major trim of around 12,000 employees in 2016. The hope here is by slimming down expenses, the company can somehow appease its investors and maximize possible profitability.

These Intel lay off procedures could wipe away as much as 15% of the company’s fixed costs, which makes a massive impact overall. This is a smart business decision for the moment when the market is in a questionnable state. The company admits that besides the post-pandemic drought, another cause for its financial woes is the lack of innovation. As such, the company promises to do its best to bring revolutionary, cutting-edge performers to the market that will cement its place as top dog of the industry once again.

You can check out details in a short video summary by Ed Ludlow of Bloomberg Business.

If Intel does follow through on its promise, then its competitors better beware.