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Intel’s Sales and Marketing Group (SMG), which works with companies to help them solve business problems using Intel technologies, is targeting a 35% reduction in costs, as revealed during an all-hands meeting for the group on August 5. This massive cut will affect jobs and marketing expenses, with everyone given the directive to “simplify programs end-to-end” by the end of the year. This grim news comes soon after the company announced that it would lay off 15% of its workforce — counted to be more than 15,000 employees.
The semiconductor and processor giant said in a statement to CRN, “We are becoming a simpler, leaner, and more agile company that’s easier for partners and customers to work with while ensuring we focus our investments on areas where we see the greatest opportunities for innovation and growth.” Intel added, “This is all about building a stronger Intel for the future, and our partners are integral to our future plans.”
One of the most painful things that needs to happen at Intel SMG concerns the specific job cuts it needs to make. One way it could accomplish this is by reducing positions with overlapping responsibilities. This includes employees handling customer accounts and teams that focus on certain industries. Sources say that these kinds of overlap can make it confusing for customers to know who their point of contact is, as they must interact with both salespeople who take care of the account and other Intel employees who don’t have any ownership of it.
Another way that the SMG could save on costs is by reducing its marketing budget and simplifying programs. Intel expects to save at least $100 million by doing this in the latter half of 2024, with an additional $300 million in savings for 1H25. Aside from the monetary benefits, this simplification would also “enable faster decision [making] and [return on investment] measurement.”
Intel’s market development fund (MDF) will also be greatly impacted by the signaled cuts. The MDF plays an important role in Intel’s marketing efforts, as OEMs and other Intel partners can tap into these funds to host events, training, and more. A former Intel executive even said that the MDF played an important part in helping Intel to win business, even as its products lost their competitive edge.
“Intel lost their mojo on product leadership, and the most valuable thing we were still able to offer the partners was the sales and marketing relationship and the funding,” warned the former executive.
This upheaval may be crucial for Intel if it wants to survive in the increasingly competitive semiconductor landscape. However, its partners are waiting to see how these changes will impact their business. “The people that we work with have zero understanding of what’s going to happen. Everybody’s hunkering down and just waiting to hear something,” said Maingear CEO Wallace Santos.
Another Intel partner executive who asked not to be named said of Intel, “They’re investing in the foundry. They have to do that. But they’re trying to also get this business back on its feet at the same time, and doing two things at once is nearly impossible, so something’s got to give.” But they were also concerned about how these cuts and reductions would affect Intel’s services to its partners and customers. The executive asks, “It’s just a matter of, well, how much is the give?”
Source Agencies
