Got confirmation that the CFO Dave Z is instructing for 25% budget cuts across all SG&A spends, so there will be cuts to headcount. Any other orgs getting cuts?
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Explain "failure at the executive level" ?
Which executives, the BU leaders or ?
Market tracking issues are deeper than just “finance’s fault”. The vast majority of finance works to support operations and factories - this was a failure at the executive level who either were fed poor data by market analysts or ignored the data they were provided.
Does the bloated inefficiency have something to do with Q2 earnings reporting? in the earnings call, there was question about why no preannouncement. Something said about not tracking market more frequently (finance people’s responsibilities?)
Everyone in US based support functions should start polishing their resume. I agree with below - it’s crunch time and Intel knows it. They already have strongholds for finance in Malaysia and CR - entirely possible they intend to fully phase out ops finance as we know it in the US and fully outsource. It’s sad really, especially after accepting billions in govt money to built fabs here “create jobs in the US”.
I know Intel really only sees engineers as valuable assets, but the support functions are jobs too.
Ouch. Finance here too, and I agree - finance itself is very bloated and needs some trimming. As an analyst, I have 7 layers between me and CFO, two of which are probably completely unnecessary, my team could probably get our work done with 75% of our current HC and still have a WLB, and a handful of tasks that we could be doing have been outsourced to a handful of various support teams both locally and foreign that only create extra work when we have to root cause THEIR mistakes.
They could make huge cuts to middle management, consolidate all of these finance support functions, and trim the fat off of US teams that has built up during the COVID glut, but the sad reality is they will probably slash mostly lower-level (G5-7) US based analysts (those doing the actual work) and send those teams abroad. See Boeing
SG&A - Sales, General & Admin (Sales, Marketing, HR, Legal, Finance, etc.)
The cuts seem to be against mid-2022 refresh spends so not even against 2023, which was higher than current ‘22 forecast.
And in Finance, this has already led to a huge reorg where Finance teams are being consolidated under executives and controllers instead of backfilling those who rotate or retire.
The cuts will hurt a lot of people but these support orgs have gotten too big/inefficient and I’m speaking from first hand perspective.
If you don’t work in a FAB helping produce wafers, you’re probably SG&A
What’s SG&A ?
The little guy with superior product sees imploding sales while the high margin server continues to grow says Intel is really going to get ugly.
“The Dr. Lisa Su-led company said third-quarter sales would be about $5.6B, compared to estimates of $6.71B. The company blamed the shortfall on a weaker-than-expected PC market and continued inventory corrections.
“The PC market weakened significantly in the quarter,” said Dr. Su in a statement. “While our product portfolio remains very strong, macroeconomic conditions drove lower than expected PC demand and a significant inventory correction across the PC supply chain."
Dr. Su added that AMD's (AMD) data center, embedded and gaming segments continued to show strength and the company's business model and balance sheet will help it navigate the downturn.
Breaking it down by segment, client revenue fell 53% sequentially and 40% year-over-year to $1B, while data center revenue rose 8% ”
25% seems steep. Is this cutting against FY 2023 or Q4? Initial look at '23 was done in the spring when the economy/PC market wasn't so grim - I'm sure there's plenty of fat in that budget to cut out (i.e not proceeding with planned hiring/SGA spending increases, and maybe some more tactical cuts) vs. cutting 25% in SGA (which let's be honest, is mostly salaries, and would imply a HC reduction of a similar %).
But then again, I'm a lowly pleb with no real insight into what the G9+s are concocting.
It'll be another clean up effort, the bottom will be annihilated...
SG&A, is that Ms. April B ?