Interesting to note that for fiscal 2023, based on number of employees, Intel was the lowest revenue / employee performer:
nVidia / $26.97b / 26,196 / $1,033.5k/employee
AMD / $22.7b / 26,000 / $873.1k/employee
Qualcomm / $35.82b / 50,000 / $714.4k/employee
Intel $54.2b / 124,800 / $434.3k/employee
Obviously controversial, but instead of attrition by 1000 cuts from a rusty kn--e, why don't they bite the bullet and reduce headcount by at least 45k employees, saving about $9b/year?
Obviously not a great outcome for those affected, but at least it will get the company closer to what you'd expect for this sort of business.
(They probably couldn't afford to execute such a mass reduction.)
13 replies (most recent on top)
Hey denser muppet @dhb:
Regardless of how a company generates a product, revenue per employee is still a measure of efficiency.
For example, AMD outsources their manufacturing and pays for wafer starts whereas Intel manufacturers some of their products within their factories, again paying for wafer starts there, as well as 30% outside. "Gelsinger believes that due to these mistakes, Intel has outsourced approximately 30% of its wafer production to external contract manufacturers like TSMC, with a goal to reduce this share to about 20%." (https://www.trendforce.com/news/2024/04/03/news-intels-chip-making-unit-lost-7-billion-last-year-foundry-unit-hits-loss-peak-this-year/#:~:text=According%20to%20Reuters%2C%20Intel%20stated,decrease%20from%20the%20previous%20year.)
To me, the lower Intel $revenue / employee is a reflection of how inefficient / inappropriate their fabs are, regardless of how they implement their products. Or to simplify for you, if Intel sold their fabs and outsourced all their manufacturing to say TSMC, one can only hope that their efficiency would be greater.
Too many PEs, Senior PEs, Fellows doing grade 8 work (especially in NEX in Austin, Texas under Sachin Katti)! Fire them including Sachin Katti his direct reports and downgrade all the PEs, Senior PEs, Fellows to grade 8-9!!!
Which org puts AI everywhere (no pun intended)?
In my opinion this financial dysfunctional has existed for decades.
And the reason this is so difficult to solve is because Intel is made up of many organizations, usually with very popular leaders that can tell convincing stories. And typically these stories can easily deceive financial professionals and other leaders through usage of acronyms, buzzwords and biased success stories. For instance, I know an org that now puts "AI" in their org name and tacitly encourages all project managers to use the term in their documents. But this said organization with many well compensated employees produces something that customers barely touch.
@1jxs - Agreed, assuming a chip company and a car company will have similar financials is pretty dmbb
Honda’s revenue per employee is 650K
I guess they need to cut people as they have 197K employees.
See how dmbb this is?
Look at margins you financial illiterates.
Revenue - (cost of goods sold).
Hint - salaries are included in the costs you dimwits.
Cutting NEX would be a great start.
Be careful what you ask for… the only way that you will get the savings per year stated by OP is if they are laying off primarily US based employees. There is no way the savings per employee fired is $200k per year if they are based outside the US. Intel has too many problems across the board to ever be competitive without major changes… the product line is stale , the architecture is stale, process technologies are stale. The competition is beating intel across the board. Spending $100 billion on factory capacity is misdirected. Intel will continue to bleed money for the foreseeable future. There are way better companies to invest in.
The graphics team needs some cuts too, they are still shipping cr-p used in the MSI Claw, the joke of a handheld trying to compete with Steam Deck. Just google "MSI Claw" and see the endless articles about how bad the device is, mostly due to the graphics driver.
Here's a good summary/recap: https://www.digitaltrends.com/computing/msi-claw-early-reviews/
intel needs to be split up
it has reached and surpassed clown critical mass
from the top down
comparing to fabless is not accurate.
A better comparison would be nvidia + tsmc
AMD + tsmc
And with this comparison we are still behind, so yes, cutting 20k of bozos and paper pushers is what this company needs.
The issue is that through those misguided voluntary leaves the best have already left and we may well have exceeded the critical mass of bozos and paper pushers.
OP isn’t wrong… a big cut is very much needed… but I don’t think the fortitude or sense exists to do so… I’d argue that in a year when you already stand to lose $11-12 billion in Foundry, rip off the bandage now and rebuild back over the next 3-6 years…
They have fabs you dense muppet!
Of course they have more employees.
Intel needs to employ smart people than OP.
Better metric is gross margin.