Shares of Intel (NASDAQ:INTC) stock are in focus today after the semiconductor manufacturer announced that it is cutting hundreds of jobs at its California office and indicated that more staff reductions are on the way.
The latest job cuts follow thousands of positions that Intel eliminated in 2022. They were announced on the same day that Google parent company Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) announced that it is shedding 12,000 positions in preparation for a global recession.
INTC stock is up less than 1% today on news of the latest job cuts. Over the last 12 months, the company’s share price has declined 45% to trade at $28.42.
What Happened
Intel said it is laying off 201 workers at its headquarters in Santa Clara, California. The layoffs are scheduled to be completed by Jan. 31 of this year. At the same time, Intel says it is considering eliminating 343 jobs at its office in Sacramento, California. If the Sacramento cuts happen, it would bring Intel’s total workforce reductions in Northern California to more than 500 positions.
Impacted employees have reportedly been given 60 days’ notice that their jobs were being terminated. Last fall, Intel announced thousands of job cuts in an effort to cut costs and cope with slowing sales of personal computers that use its semiconductors and microchips. In some areas of its business, Intel cut 20% of staff. The company had about 121,000 employees worldwide last autumn.
In July of last year, Intel warned that its 2022 sales would be about $11 billion lower than previously forecast.
Why It Matters
Intel is the latest technology giant to announce layoffs in recent weeks. Earlier this week, Microsoft (NASDAQ:MSFT) announced that it is cutting 10,000 jobs. Amazon (NASDAQ:AMZN) recently announced the elimination of 18,000 positions. The job cuts come as higher interest rates cool the U.S. economy, with many economists and analysts worried that we are entering a recession.
In Northern California, where Silicon Valley is based, the job cuts are likely to have a negative impact on local and regional economies. Other tech companies that have announced workforce reductions in California include Meta Platforms (NASDAQ:META), Salesforce (NYSE:CRM) and Twitter.
What’s Next for INTC Stock
The job cuts at Intel have the company’s stock up slightly today as investors view the cost-cutting move as a positive development. However, employee layoffs are a sign of growing problems within the tech sector and, more broadly, the U.S. economy. And, these may not be the last of the job cuts at Intel and other tech firms. More pain might be ahead.
On the date of publication, Joel Baglole held a long position in GOOGL and MSFT. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
