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Intel Reports Second Quarter 2024 Financial Results
- bluedino 2y agoReducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
- fire-them-all 2y agoINTC should fire the right people!
- softfalcon 2y agoThis sounds worryingly like “sales are down, cut costs to maintain profitability to spike our stock numbers” and not enough focus on what I believe is actually wrong, which is that they can’t seem to reliably make competitive processors in a stiff market. Anyone else feel like this is bean counters at Intel playing the wrong game? I personally feel like leadership at Intel lost the plot almost a decade ago.
- crowcroft 2y agoI'm not saying you're wrong, although even after reducing headcount by 15k they still have about as many employees as TSMC, NVIDIA and AMD combined.
- 0xB31B1B 2y agothey design and produce chips, TSMC produces but does not design, NVIDIA and AMD design but do not produce
- tz18 2y agoNumber of employees is not the correct comparison, total labor cost is. Intel intentionally pays middling compensation so you would expect to need more people to do the same job.
- Detrytus 2y agoI believe the ambitious plan by Gelsinger to release "5 nodes in 4 years", as well as building couple of new factories necessarily resulted in a lot of redundancy and hiring people who were needed for the transition period, but not necessarily long term. Now that they are nearing the completion of Intel 20A and 18A R&D cycle it seems logical point to start cost-cutting.
- softfalcon 2y agoOne can only hope. Goodness knows it would be better if Intel were more competitive in this market. Let's cross our fingers that you're right and we see a resurgence after the new fabs come online.
- bluedino 2y ago10 years from now, when the downfall of Intel is being taught at business schools, what are going to be the big takeways and now-obvious mistakes?
- bgnn 2y agolegacy. being over confident about their fab innovating faster than competition made their design side take the second seat and not innovate. There wasn't a real need for big design innovation although a lot of R&D spending happened on design. Plus they didn't diversify their product portfolio. They missed the whole mobile market because of this, likewise the GPU and accelerator market. When their fab hit a rock with 14nm and 10nm process tech advantage was more. This gave rhe edge to all other design companies and made it clear that how behind Intel was on design front.
- osnium123 2y agoMaybe they should have shut down the fabs and gone all on TSMC. Manufacturing in the US is a dead end due to costs and incompetence.
- 2OEH8eoCRo0 2y agoDon't run your own fab? It makes business sense but I don't know if I like that answer. What if everyone did that? Should everyone just use TSMC? That's stupid IMO.
- softfalcon 2y agoThis is what Boeing did for their manufacturing... look how it's playing out for them now.
- frognumber 2y agoDon't screw up running your own fab is the better lesson. * Intel foundry services were perhaps a decade or two too late. Running a fab needs scale. That had to come before they lost the technology edge. * Intel treatment and mismanagement of engineers was well-known in 2000, and you need the best and brightest. * Leadership needs to understand core business / technology. Bob Swan. Arguably Brian Krzanich. Paul Otellini. Just a lot of clueless at the top. Etc. The point is Intel wasn't "everyone." Intel was at the very top of the game a quarter-century ago. That was their position to lose, which they did in a spectacular fashion. I continue to hope for a Microsoft-style comeback, but it's becoming increasingly unlikely.
- layer8 2y agoLeadership changed back to an engineer with the return of Pat Gelsinger in 2021. I’d give him a couple more years. It takes time to turn around a big ship like Intel.
- ladyanita22 2y agoEveryone around here keeps talking about how the problem of Intel is that it was a Business guy running the company and not an engineer, and it feels so similar to when people claimed Phil Spencer was going to save Xbox. Truth is, Pat is doing nothing despite the generous government subsidies
- osnium123 2y agoThe previous CEO was going to shut down the fabs. Maybe it would have been the right strategy but Pat Gelsinger had reoriented towards fab manufacturing for what it’s worth.
- mey 2y agoNot everyone is cut from the same cloth. Look at AMD, their CEO history has been staffed exclusively by people with engineering backgrounds, but their performance has had more than a few rocky points.
- epolanski 2y agoI think that in a business like hardware and foundries you can really judge the CEO in no less than 4/5 years.
- LarsDu88 2y agoThis is simply not true. They are building giant fabs in Arizona and Ohio from those subsidies. It takes YEARS to realize the benefits of these changes. The problem is, to stopgap TSMCs growing lead, Intel resorted to cranking up voltage on the last two generations of chips leading to what will be an imminent gigantic ass lawsuit.
- yndoendo 2y ago
- electriclove 2y agoBean counters were not the cause of this titanic fail. And at this point, they need to shed their excess weight and find a way to stay relevant.
- NoPicklez 2y agoWe have very little understanding of the bloat that Intel might be carrying, or the projects they have underway that were not making progress or perhaps not the innovation expected. Financial reports are going to be exactly that, focused on the numbers and appearing to investors to be maximising their value. You want to carry a perception that you are focusing on the positives and the innovations being carries forward, as opposed to mulling over what "might be wrong". All companies go through ups and downs, but you do not want your financial report to have a theme of these are the things that are wrong.
- bgnn 2y agowell all of their fab operations can be called bloat because they aren't doing progress but this is still arguably the most valuable portion of the company. they should have spun-off their fab years ago as AMD did. fabs business model isn't shareholder value compatible.
- johnnyanmac 2y ago>You want to carry a perception that you are focusing on the positives and the innovations being carries forward, as opposed to mulling over what "might be wrong". so, empty platitudes that turn into none or negative change. Gotta love the modern day business.
- NoPicklez 2y agoStipulating in your financial report where your R&D is focusing and what those outcomes are hopefully going to be are not empty platitudes that turn into none or negative change. I doubt that Nvidia putting in their financial reports last year they were focusing their R&D on AI hardware turned into none or negative change
- johnnyanmac 2y agoLots of hope in your comment. Not much hope in my mind. It's just been too shitty a year for me to trust these reports. The worst parts are that the shareholders barely care if they lie. They want to be lied to. They aren't investing because of product confidence after all. Pessimism aside: they did this exact song and dance some 7 years ago. So I'm not entirely operating off bad vibes but on history and current trends. Like I said, they already basicslly lost the AI race. If they want to compete for scraps, power to them. I just hope employees jump ship before the next layoff wave.
- StringyBob 2y agoIntel had over 130,000 employees as of a couple of months ago. 15% layoffs is nearly 20,000 people.
- electriclove 2y agoThe ‘flagged dead’ comment is right on. Intel has been a bloated bureaucracy for a long time now and things need to get tightened up for it to continue.
- ProllyInfamous 2y agoI agree, so I am quoting it, below: >Fire 80% of them. Twitter had probably more talent per capita than Intel. If they can fire 80% most companies should.
- wwtrv 2y ago> If they can fire 80% most companies should What's special about "them"? Twitter was technically never a particularly complex product that required some kind of exceptional talent. Not even remotely in the same ballpark compared to what Intel is doing (or trying to do anyway...)
- JeremyNT 2y agoIndeed there are highly valuable experts at Intel - there have to be, for them to function at all. They're an engineering company making incredibly complex products, unlike Twitter which just sold ads. But there are also likely to be countless "twitter-like" employees too, paid to sit on their hands or faff about with branding or tinker with devops parlor tricks or gate access to resources that engineers need. So the current level of cuts passes the "gut" check for me. They surely have less "chaff" than Twitter, and it's crucial not to accidentally cut too many key personnel in the process.
- AnimalMuppet 2y ago
- hylaride 2y agoSuspending the dividend is poetic in a sense. They'd been taken over by bean counters decades ago and slowly pissed away their privileged position at the top of computing. They essentially ended up where Boeing did, but at least didn't kill anybody.
- Vecr 2y agoMaybe. On Intel's scale almost everything you do wrong kills people, at least statistically. Though, so does everything you do right, but probably less. How many human lifetimes were spent cleaning up and mitigating the microarchitecture vulnerabilities?
- DaoVeles 2y agoA lesson that has to be taught again and again. You can run a business into the ground but look great for years on inertia alone. Intel has been crumbling for a long while but the inertia of previous decades meant it wasn't apparent.
- kranke155 2y agoIts incredible how quickly it can happen as well.
- hylaride 2y agoIt's exactly the same as the Ernest Hemingway quote about how bankruptcy happens: Slowly, then suddenly.
- danielmarkbruce 2y agoThat financials are a very laggy indicator of reality is the lesson that doesn't actually seem to be properly taught. It's even worse in software. The stickiness can make companies look great when they are actually a mess. The cost of acquiring companies can make companies look like money losers when they are actually doing well. Intel has been a mess for a decade at least, an obviously going to zero. But the numbers only started going badly a few years back.
- deleted 2y ago[deleted]
- dredmorbius 2y agoAdditional coverage from: The Register: "Intel to dump 15 percent of staff to save costs" <https://www.theregister.com/2024/08/01/intel_to_ax_headcount/ https://www.theregister.com/2024/08/01/intel_to_ax_headcount...> CNBC: "Intel to cut 15% of headcount, reports quarterly guidance miss" <https://www.cnbc.com/2024/08/01/intel-intc-q2-earnings-report-2024.html https://www.cnbc.com/2024/08/01/intel-intc-q2-earnings-repor...>
- fire-them-all 2y agoINTC and its subsidiaries should consider a comprehensive reorganization. The company is struggling, and it seems they're making poor decisions regarding staffing and leadership. Mediocre and ineffective leadership persists at all levels, and the business and sales departments are likely contributing to the issues as much as HR. If you want to help turn things around, contact the board members and CEOs directly. Make it clear that they should not receive any compensation until they have successfully revitalized INTC, MBLY, and other related companies. For reference, these are the KPIs for them: INTC's market cap should be currently around $250 billion and MBLY's is about $35 billion. ====================================================== Jensen Huang, please buy INTC!!!! PLEASE BUY IT AND MAKE IT GREAT AGAIN! PLEASE PLEASE PLEASE!
- LarsDu88 2y agoNvidia could probably buy a fab off of Intel. As a famous chip exec once said "Real men build fabs" However, the secret sauce of Nvidia is simply using TSMC anyways so...
- honkycat 2y ago$152 billion in stock buybacks. We don't have an economy anymore, we are just handing money to the ultra-wealthy. US. Total economic collapse. Hard landing. This is the beginning of the end. We really had the chance to make something beautiful with this country, but the 1% bought and sold it into the ground. Half our politicians aren't even trying to keep it running anymore.
- ProllyInfamous 2y agoHeck, our politicians are at the point where they're taking their bribes in pure gold (see NJ's recent senatorial shame). A good friend of mine is the son of a former hedgefund manager... who told me in 2018 "owning real gold is foolish;" in 2024, he's recently told me about his expanding gold collection. I have made even more returns on silver/BTC, but anything "real" is probably durable enough to last for (hopefully at least) another decade of keep kicking the can down the road... Quoting my favorite family member of The Silent Generation (pre WW2 birth), "Nobody wants to be the last one at the party, because then you have to help clean up all the mess!"
- johnnyanmac 2y agoto make sure I understand this: is this the rich getting ready for the collapse of the USD?
- ProllyInfamous 2y ago>getting ready for the collapse of the USD? It's happening, real-time. Yes. All "trickling up," exactly as-designed: into more-durable asset classes, largely unaffordable to Joe American. Just for reference, a troy pound of gold currently trades for around $30,000; whereas in 1970 the same mass was, officially, $420. e.g. Multiple OPEC countries trading oil in non-USD transactions (against policies to only do so, set since early 1970s). e.g. 2020, largest publicly-traded company was a state-run oil extractor (Aramco), worth barely only $2 trillion [two million million dollars]; 2024 (so far) there were THREE $3T+ marketcaps, each a massively-inflated evaluation; bitcoin is more-stable & more-valuable than most tech stocks e.g. #100 publicly-traded asset (by market cap), in 2020, was worth approximately $110B; #100, in 2024, is worth approximately $155B Never forget that Nixon prosmised, just as countless other politicians are trained to do: that this suffering is only TEMPORARY. They're technically not incorrect, when temporal definitions are left undefined.
- llmblockchain 2y agoI live near Intel HQ and I know many Intel employees. Everyone I know has been interviewing at other companies for the last 8-12 months. I haven't met a single person that had a positive thing to say about Intel and its future.
- myth_drannon 2y agoIntel stock is down -24% in pre-market trading. That's going to be a "fun" Friday for sure.