Intel will reportedly lay off thousands of employees as PC sales slow

Intel had long been expecting a decline in PC sales after a period of heightened demand due to work-and-study-from-home arrangements brought about by the COVID-19 pandemic. In July, it admitted to Nikkei that it was going to raise the prices of its processors and other chips due to “inflationary pressures” later this year. Turns out that may not be the only move Intel is making to weather the declining PC market. According to Bloomberg, Intel is planning to cut thousands of jobs and could make the announcement around the same time it’s releasing its third quarter earnings report on October 27th. 

The company slashed its sales and profit forecasts for 2022 back in July, when it said that it expects revenue for the year to be $11 billion less than previously projected. Chief Executive Officer Pat Gelsinger said during its earnings call for the second quarter that the company “will look to take additional actions in the second half of the year” to improve profits. Bloomberg Intelligence analyst Mandeep Singh said the layoffs could reduce the costs Intel incurs to keep the company running by around 10 to 15 percent. Singh also said that those costs could be worth at least $25 to $30 billion.

Mobileye, the the self-driving tech firm that Intel had purchased for $15.3 billion back in 2017, recently filed for an IPO. Intel intends to keep most of what it earns from the IPO for itself and to help finance the chip factories it’s planning to build. But projected earnings from the offering may not be enough to prevent the mass layoffs, which will affect various divisions within the company. Certain groups, such as the sale and marketing department, will reportedly see their numbers reduced by up to 20 percent. 

Over the past year, Intel took steps to achieve its goal of expanding its foundry business. It earmarked $20 billion to build a massive chip-making facility in Ohio, which it intends to turn into the biggest “silicon manufacturing location on the planet.” The company also purchased Tower Semiconductor, a chipmaker catering to clients across industries, for $5.4 billion. There seems to be no indication that those expansion plans are changing, and Bloomberg said that Intel intends to pursue the goals it set for itself as a leaner company.

Intel-owned autonomous driving tech company Mobileye files for an IPO

Mobileye, the self-driving tech firm that Intel had purchased for $15.3 billion back in 2017, has filed for an IPO with the Securities and Exchange Commission. When Intel first announced its plans to take Mobileye public late last year, the autonomous driving firm was expected to have a valuation of over $50 billion. Now according to Bloomberg, Intel expects Mobileye to be valued at around $30 billion, due to soaring inflation rates and poor market conditions. Regardless, it’s still bound to become one of the biggest offerings in the US for 2022 if the listing takes place this year. 

Intel intends to retain a majority stake in Mobileye, but Chief Executive Pat Gelsinger previously said that taking it public would give it the ability to grow more easily. He also said that the company plans to use some of the funds raised from the IPO to build more chip factories. Intel revealed its big and bold foundry ambitions in 2021 when it announced that the company is investing $20 billion in two Arizona fabrication plants. Back then, Gelsinger even proclaimed that he was pursuing Apple’s business. Earlier this year, the CEO revealed earmarking another $20 billion to build two fabrication plants in Columbus, Ohio. The company expects that facility to eventually become “the largest silicon manufacturing location on the planet.”

Mobileye didn’t specify how much a share would cost in its filing with the SEC. It did say, however, that it will use portion of the proceeds it will get from the IPO to pay debts. The firm also talked about its history in the filing and how its revenue grew from $879 million in 2019 to $1.4 billion in 2021, representing a growth of 43 percent year-over-year. 

Meta reportedly suspends all hiring, warns staff of possible layoffs

As with many other industries, the tech sector has been feeling the squeeze of the global economic slowdown this year. Meta isn’t immune to that. Reports in May suggested that the company would slow down the rate of new hires this year. Now, Bloomberg reports that Meta has put all hiring on hold. 

CEO Mark Zuckerberg is also said to have told staff that there’s likely more restructuring and downsizing on the way. “I had hoped the economy would have more clearly stabilized by now, but from what we’re seeing it doesn’t yet seem like it has, so we want to plan somewhat conservatively,” Zuckerberg reportedly told employees. 

The company is planning to reduce budgets for most of its teams, according to Bloomberg. Zuckerberg is said to be leaving headcount decisions in the hands of team leaders. Measures may include moving people to other teams and not hiring replacements for folks who leave.

Meta declined to comment on the report. The company directed Engadget to remarks Zuckerberg made during Meta’s most recent earnings call in July. “Given the continued trends, this is even more of a focus now than it was last quarter,” Zuckerberg said at the time. “Our plan is to steadily reduce headcount growth over the next year. Many teams are going to shrink so we can shift energy to other areas, and I wanted to give our leaders the ability to decide within their teams where to double down, where to backfill attrition, and where to restructure teams while minimizing thrash to the long-term initiatives.”

In an earnings report, Meta disclosed that, in the April-May quarter, its revenue dropped by one percent year-over-year. It’s the first time the company has ever reported a fall in revenue.

Word of the hiring freeze ties in with a report from last week, which suggested that Meta has quietly been ushering some workers out the door rather than conducting formal layoffs. In July, it emerged that the company asked team heads to identify “low performers” ahead of possible downsizing. The company is said to have been cutting costs on other fronts, such as by cutting contractors and killing off some projects in its Meta Reality Labs division. Those reportedly included a dual-camera smartwatch.

SEC sues former MoviePass executives for fraud

The US Securities and Exchange Commission has filed a lawsuit against two former MoviePass executives. In a federal complaint seen by Bloomberg, the agency accused Theodore Farnsworth and Mitch Lowe on Monday of misleading investors about the viability…

Peloton’s connected Bike rentals are now available across 48 states

Peloton is expanding a rental program for its Bike and Bike+ fitness equipment. Now, anyone in the contiguous US (sorry, Alaska and Hawaii) can try one of the connected exercise bikes at home without having to shell out at least $1,445. The company started testing the program in select markets earlier this year. It’s worth noting that the rentals may still not be available in some remote locations.

A Bike rental costs $89 per month, while Bike+ costs $119 per month. You’ll need to pay a $150 setup fee as well. Both options include an All Access Membership, which features Peloton’s swathe of live and on-demand fitness classes. You can return the equipment for free at any time. After 12 months, you’ll be able to buy the Bike or Bike+ at a reduced rate ($895 and $1,595, respectively).

News of broader availability of the rental program comes after it emerged that two of Peloton’s co-founders are departing the company. As CNBC notes, John Foley is stepping down as executive chairman. Karen Boone will take over as the chair of the board. Chief legal officer Hisao Kushi, another co-founder, is leaving and will be replaced by Tammy Albarrán, Uber’s chief deputy general counsel.

Additionally, chief commercial officer Kevin Cornils, who joined Peloton in 2018, will move on later this month amid a broader organizational shakeup. Chief strategy officer Dion Sanders will take on many of Cornils’ duties in a new role as chief emerging business officer.

These executive changes are the latest developments in a turbulent year for Peloton as CEO Barry McCarthy tries to resolve the company’s woes. Just as McCarthy took over the position from Foley earlier this year, Peloton laid off around 2,800 workers. In July, Peloton let go around 570 employees in Taiwan amid a shift away from in-house manufacturing, and last month, the company cut another 784 jobs in the distribution and customer service departments. It will rely on third-party companies for deliveries.

Whether McCarthy’s ambitious plan to steady the Peloton ship pays off remains to be seen. It’s been a rough year financially for the company to say the least. McCarthy told shareholders last month that, despite incurring an operating loss of $1.2 billion last quarter, he sees “significant progress driving our comeback and Peloton’s long-term resilience.”

McCarthy said this week that Peloton would start selling its products in some brick-and-mortar stores after announcing the closure of many of the company’s own retail locations. It recently listed its equipment on Amazon for the first time. McCarthy also mused on making it easier for people to access third-party content on Peloton’s displays, something that’s already possible to do by jailbreaking the device.