NO LOVE AT INTEL (10/26/2024)

OCTOBER 26, 2024 - 500 IN SANTA CLARA, CALIFORNIA

The company plans to lay off another 516 employees in Santa Clara, California.

According to CEO Pat Gelsinger, “This is painful news for me to share. I know it will be even more difficult for you to read.”

OCTOBER 16, 2024 — 1,300 IN OREGON

Proceeding with its restructuring, the company has targeted 1,300 employees for layoffs in November 2024.

According to a company spokesperson, “As part of the broad-based cost savings plan we announced in August, we are making the hard but necessary decisions to reduce the size of our workforce.These are the most difficult decisions we ever make, and we are treating people with care and respect. These changes support our strategy to become a leaner, simpler, and more agile company as we position Intel for long-term sustainable growth.”

SEPTEMBER 1, 2024 — MAJOR CHANGES ON THE HORIZON

Intel is working with investment bankers to explore its options, which is never a good sign as it precedes major restructuring, divestments, and further reductions in the workforce.

Under consideration is the separation between its chip design business and its manufacturing facilities—possibly spinning off the manufacturing side of the business to boost profits and juice its Wall Street investors.

AUGUST 1, 2024 — INTEL TARGETS 15% OF ITS WORKFORCE, 15,000 EMPLOYEES AT RISK

The company has announced plans to cut around 15,000 employees, eliminate its fiscal fourth-quarter dividend, and reduce capital expenditures. A major force reduction," implementing a comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.”

According to CEO Pat Gelsinger, “This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history. This is painful news for me to share. I know it will be even more difficult for you to read.”

According to an SEC filing…

“Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher than typical charges related to non-core businesses and the impact from unused capacity,” said David Zinsner, Intel CFO. “By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet. We expect these actions to meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders.”

Cost-Reduction Plan

As Intel nears the completion of rebuilding a sustainable engine of process technology leadership, it announced a series of initiatives to create a sustainable financial engine that accelerates profitable growth, enables further operational efficiency and agility, and creates capacity for ongoing strategic investment in technology and manufacturing leadership. These initiatives follow the establishment of separate financial reporting for Intel Products and Intel Foundry, which provides a "clean sheet" view of the business and has uncovered significant opportunities to drive meaningful operational and cost efficiencies. The actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates. As a result of these actions, Intel aims to achieve clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed to support the company’s long-term strategy.

AUGUST 26, 2023 — 315 CALIFORNIA LAYOFFS

Intel plans another round of job cuts and will lay off 315 employees at the end of the month citing cost cuts.

The job cuts impact a total of 315 employees, split between 175 at the company’s Santa Clara, California headquarters, 89 in Folsom, California, and 51 in San Jose, California.

According to a previous statement, “Intel is working to accelerate its strategy while navigating a challenging macro-economic environment. We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some businesses and function-specific workforce reductions in areas across the company. These are difficult decisions, and we are committed to treating impacted employees with dignity and respect.”

JANUARY 20, 2023 — 201 EMPLOYEES IN SANTA CLARA, CALIFORNIA; MORE ELSEWHERE

Intel has announced that the number of Mission Campus employees scheduled to terminate during this period has increased to 201 and The Intel layoffs in Santa Clara are scheduled to be completed by January 31, 2023.

Intel is also adding to the 111 job cuts previously announced in Folsom, California, at a campus dedicated to research and development. There are now 176 layoffs effective January 31, 2023, and an additional 167 job cuts effective March 15, 2023.

DECEMBER 5, 2022 — 291 EMPLOYEES IMMEDIATELY TARGETED, MORE LATER

The company has announced it is cutting about 90 jobs at its headquarters campus in Santa Clara and around 201 statewide, although the number could go higher.

The cuts primarily affect Intel's research and development center in Folsom, California, as well as its Santa Clara, California, campus, and are part of the broader layoffs and cost-cutting efforts previously announced.

OCTOBER 12, 2022 — MAJOR CUTS AHEAD

Facing a major decline in desktop processors in the private and public sector, it appears that Intel is planning a major reduction in force in the near future — possibly announcing the cuts in their Third Quarter earnings report due to drop on October 27, 2022.

The impact is estimated to be in the low thousands with sales and marketing seeing major reductions.

The move was telegraphed in their Second Quarter earnings call — “We are also lowering core expenses in calendar year '22, and we'll look to take additional actions in the second half of the year,”

JANUARY 13, 2021 — NEW CEO, NEW INITIATIVES, NEW COST-CUTTING, AND LAYOFFS

The company has announced the dismissal of CEO Bob Swan with former VMware CEO Pat Gelsinger—the onetime chief technology officer of Intel, effective February 15, 2021.

Like all such changes at the top, especially at the behest of an activist investor, employees can expect divestitures, consolidations, elimination of duplicative functions, and major headcount reductions to impress the Board, investors, and Wall Street.

DECEMBER 30, 2020 — WARNING: ACTIVIST INVESTOR KNOWN FOR DEMANDING DIVESTMENTS, COST-CUTTING, AND REDUCTIONS IN FORCE BUYS INTO INTEL.

Dan Loeb’s New York-based hedge fund, Third Point Management, has taken a significant $1 BILLION+ stake in Intel. Of course, this does not bode well for employees in non-productive areas.

The bad news comes by a message from Third Point to the Intel Board of Directors “suggesting” they hire an adviser to explore “strategic alternatives.”

According to Loeb, “Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more.”

One of the most important changes in Intel would be to split design and manufacturing. Outsourcing its chip fabrication would allow Intel to utilize more third-party vendors to speed up the production cycle, cut costs, and further customize chips without investing in new fabrication production lines.

Look for the words “increased shareholder value” and “special dividends.” It is also possible that an investor consortium could take Intel private and pare the company to the bone to pay back some of the added interest expense burdens.

JUNE 23, 2020 — INTEL LOSING MAJOR CUSTOMER IN APPLE

Apple has announced that it will be transitioning to its own chip design and manufacturing over the next two years. This will end another source of revenue for Intel.

FEBRUARY 14, 2020 — 129 WORKERS AT 4 SANTA CLARA LOCATIONS

The company has announced the March 31, 2020 layoffs of 129 employees in four Santa Clara locations.

According to a company spokesperson, “As we move into 2020, our business units are focusing their resources on areas where we have the greatest opportunity for growth and, as part of that, some are planning to eliminate roles associated with projects that are no longer priorities.”

JANUARY 22, 2020 — MEDIA REPORTS THAT INTEL PLANNING A MASS LAYOFF

According to a number of technology media outlets, Intel is planning to reorganize its Data Center Group and reduce the headcount between 25% - 33%. It appears that the decision is being driven by the company’s desire to move beyond traditional CPU chips and into high-performance GPUs and devices used in large-scale artificial intelligence and analytics as well as mass-market chips that will be used to power the Internet of Things such as smart appliances.

APRIL 1, 2019 — NO JOKE: INTEL LAID OFF HUNDREDS OF IT WORKERS

Intel Corporation has acknowledged the layoffs of hundreds of employees but declines to provide a specific number.

According to a company spokesperson, “Changes in our workforce are driven by the needs and priorities of our business, which we continually evaluate. We are committed to treating all impacted employees with professionalism and respect.”

It appears that many of the layoffs were internal IT administrators whose duties may have been transferred to the large Indian outsourcer Infosys as a consolidation move to improve accountability and provide additional flexibility to the company.

JUNE 12, 2018 — Original post…

On April 19, 2016, in an email to employees, Intel CEO Brian Krzanich, announced a major restructuring effort. 

“Since I became CEO nearly three years ago, I have been working with our leadership team and all of you to transform our company from a PC company to a company that powers the cloud and billions of smart, connected computing devices. The data center and Internet of Things businesses are now Intel’s primary growth engines and combined with memory and FPGAs, form and fuel a virtuous cycle of growth. Together, these businesses delivered $2.2 billion in revenue growth last year, made up 40% of our revenue, and the majority of our operating profit."

"We expect that this initiative will result in the reduction of up to 12,000 positions globally. This will be achieved by voluntary and involuntary departures, global site consolidation, and efficiency initiatives. The majority of these actions will be communicated over the next 60 days, with some spanning into 2017.”

The handwriting was clearly on the wall and nobody should really be surprised that Intel would be announcing additional layoffs, this time approximately 65 employees at three of Intel’s Silicon Valley campuses. 

According to Intel spokesperson, John McKimmey … “Intel has decided to reduce its workforce by laying off approximately 65 employees at its facilities. Additional benefits including payment based on years of service and career transition service will also be offered to employees in exchange for a standard release agreement.”

Of course, by “standard release agreement,” Intel means non-disclosure agreement not to speak to anyone about the layoffs or other company business.

It should be noted that Intel’s layoff policies are being examined by the U.S. Equal Employment Opportunity Commission over allegations of age discrimination in previous layoffs extending back to 2015. Intel categorically denies any allegations that it targeted older employees in the layoffs saying, “Factors such as age, race, national origin, gender, immigration status, or other personal demographics were not part of the process when we made those decisions.”

There is little or no doubt that the chip marketplace is changing especially with the move away from desktop and laptop computing to mobile devices and the lightweight browsers used to connect users with the growing cloud services marketplace. For many years, I was a purist, insisting on Intel motherboards, chipsets, and processors for our numerous system builds. Today, I have no such concern and am willing to accept anything that works. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere ... are you now wondering, Am I Next?

am i next? NO LOVE AT McDONALD’S (04/04/23)

APRIL 4, 2023 — WORK FROM HOME UNTIL LAYOFF NOTICES GO OUT

In a not-so-surprising move, McDonald’s has temporarily closed its corporate offices across the country and requested employees to work from home while a mass layoff is pending.

According to a company spokesperson, “During the week of April 3, we will communicate key decisions related to roles and staffing levels across the organization. We want to ensure the comfort and confidentiality of our people during the notification period.”

JANUARY 7, 2023 — REORGANIZATION AND LAYOFFS ON THE HORIZON 

McDonald's CEO Chris Kempczinski warned of restructuring and possible layoffs on the horizon to facilitate operational efficiencies and advance labor-saving innovation.

"We will evaluate roles and staffing levels in parts of the organization, and there will be difficult discussions and decisions ahead. We will look to our strategy and our values to guide how we reach those decisions and support every impacted member of the company. We expect to finalize and begin to communicate key decisions by April 3, 2023."

McDonald’s appears especially concerned with California’s new woke labor board that will control the labor relations and wages of fast food restaurants like McDonald’s.

 JUNE 8, 2018 — Original post…

Chicago, Illinois-based McDonald’s, the world’s largest restaurant chain, is embarking on a significant restructuring plan in response to declining revenues, changing consumer preferences, and stiffer competition. The target is said to be $500 million in cost reductions by the end of 2019. CEO Chris Kempczinski announced a restructuring plan designed to “eliminate layers within our organization,” which is likely to result in the layoffs of hundreds of employees in middle management.  

 CEO Chris Kempczinski: “I recognize that change is difficult and that eliminating layers within our organization means some employees will ultimately exit our system.” 

McDonald's spokesperson Terri Hickey: "We are putting into place a new U.S. field structure that will better support our franchisees and will ensure McDonald’s continues on a path to being more dynamic, nimble, and competitive. These planned actions are consistent with our previously announced $500M G&A targeted savings, which we expect to achieve by the end of 2019.” 

McDonald’s has attempted various “fixes” over the last three years, and this restructuring is an ongoing effort to find the right balance between business and administrative staffing and costs.  If you are in middle management, the handwriting is on the wall.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

AM I NEXT? NO LOVE AT DEUTSCHE BANK - 2 (UPDATED)

UPDATE: JULY 11, 2019 — 126 LAYOFFS AT CLOSING UNIT

The company has filed a WARN (Worker Adjustment and Retraining Notification) notice informing the State of New York that the company will be laying off 126 employees starting August 7, 2019. This is only the beginning.

UPDATE: JULY 7, 2019 — IT’S WORSE THAN EXPECTED. THE ESTIMATED REDUCTION IN HEADCOUNT IS NOW 18,000 EMPLOYEES.

Original Post

There should be absolutely no surprise when Deutsche Bank announces a mass layoff of up to 10,000 employees, thousands of whom are operating in the United States.

Especially when the bank has paid billions of dollars in fines over the last several years for alleged wrongdoing such as market manipulation, money laundering, lax regulatory and reporting. In addition to having failed a number of regulatory “stress tests,” and having the bank’s U.S. operations are under continuing scrutiny by the Federal Reserve. 

In a rare and secretive finding for a major financial institution last year, and one that was just publicly disclosed, the bank was assigned the Fed’s “troubled condition” status based on its capital adequacy, asset quality, management, earnings, liquidity and sensitivity to market risk. 
This does not bode well for a bank operating in relatively good times. A bank operating as a “troubled” bank may need to seek regulatory approval before terminating or transferring employees in management and certain key functions. 

Deutsche Bank is currently one of the most systemic dangers to the financial system if one considers that they hold approximately $60 TRILLION (as of December 2017) in notional derivative exposure and a five percent loss would exceed the bank’s capital and render the enterprise insolvent. 

In a June 1, 2018 “Dear Colleagues” memo from newly appointed (April 2018) CEO, Christian Sewing attempted to counter the avalanche of bad news ...

“Let’s be straightforward: the newsflow is not good. On Thursday, several media outlets reported that more than a year ago, the Federal Reserve had downgraded three of our US subsidiaries and classified them as being in “troubled condition”. Our share price fell sharply in reaction. This Friday morning, the news followed that S&P Global Ratings had downgraded one of our credit ratings, the Long Term Issuer Credit Rating.

I know that the current newsflow must give you the feeling that the bank is not getting any respite. That’s why I think it’s important for me to put this news in perspective.

Let’s start with the Federal Reserve, our principal regulator in the US. We do not comment on the details of our dialogue with our regulators. But as we clearly noted in our annual report in March 2017, Deutsche Bank has been engaged in remediation work to strengthen our internal control environment and infrastructure and to address concerns that have been identified both internally and by our regulators.

On the Federal Reserve’s website (www.federalreserve.gov) you can read about four public resolutions of enforcement actions. These actions are principally related to or the result of weaknesses in our internal controls and infrastructure. These weaknesses have arisen over many years. As you know, we have made progress in remediating them in the past year. We’re not yet where we want to be, but we’re steadily getting there.

Financially, the US subsidiaries mentioned in the media are all very sound. For example, our principal US banking subsidiary, Deutsche Bank Trust Corporation Americas, or DBTCA, has a core capital ratio of 98.5 percent. At the end of the first quarter of 2018, it held 75 percent of its 42.1 billion-dollar balance sheet in cash. The problems we face are not a question of financial soundness, but involve identified infrastructure and control deficiencies, which we are tackling.

At Group level, our financial strength is beyond doubt. And here I’d like to quote today’s announcement by S&P: “…actions management took in 2017 to strengthen the balance sheet (in terms of capitalisation, liquidity and asset quality)… gave the bank good solvency and liquidity buffers.”

At a glance, the facts are:

— Deutsche Bank Group’s common equity tier 1 ratio of 13.4 percent is higher than many peers and is well above the regulatory requirement of 10.65 percent.
— Our liquidity reserves were 279 billion euros at the end of the first quarter – close to their all-time highs.
— Our credit and market risk levels have rarely been so low. Speculation that we might be exposed to substantial hits from the political uncertainties in Italy is completely unfounded.
— And last but not least: our funding plan for this year is well advanced, and at very favourable rates. We’re very well positioned to react to excessive movements in debt markets.

So why were we downgraded?

S&P does not base its decision on any doubts about the strength of our balance sheet. Rather, we are quite simply not profitable enough. The rating agency writes that “the bank appears set for a period of sustained underperformance compared with peers” and sees “non-negligible execution risks” for our strategic plans.

The downgrade impacts the Long-Term Issuer Credit Rating, which was lowered by one notch from A- to BBB+. All our ratings remain in investment grade territory. It’s also important to point out that the outlook for all our ratings is stable. S&P comments that the stable outlook “reflects our view that management will execute its strategy in earnest and, over time, will show progress against its 2019 financial objectives and so achieve its longer term objective of a more stable and better-functioning business model.”

In this respect, there’s good news in the bad: they trust us to succeed with the change which is required. My dear colleagues, we won’t disappoint.

But that also means we have to deliver – speedily and rigorously. And that’s exactly what we’re doing. As I said at the Annual General Meeting – in a disciplined manner, we’re following through on what we started. We already have the IPO of DWS and the legal merger of Postbank and Deutsche Bank’s Private & Commercial Clients business in our home market, completed a few days ago, under our belts. In Wealth Management, we’re on a growth trajectory around the globe. And in our Corporate & Investment Bank we have a clear strategic direction and we’re well on the way to implementing what we recently announced. Now, we need to continue on that path. No ifs, no buts.

My dear colleagues, the last few years were tough. Many of you are sick and tired of bad news. That’s exactly how I feel.

But there’s no reason for us to be discouraged. Yes, our share price is at a historic low. But we’ll prove that we have earned a better valuation on the financial markets. We’ve achieved a lot we can be proud of. We have reduced risks by billions of euros, we have strengthened capital and we have reorganised our bank. We can tick those boxes.

Now we need to look forward. At the Annual General Meeting I asked shareholders to trust us and support our plans. From many personal conversations, I know you’re already doing that wholeheartedly. My Management Board colleagues and I will work with all our strength to repay that trust – with promises that are kept, better results and fewer headlines.

Thank you for your commitment. It’s what defines our bank.”

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?