Intel Faces Losses, Layoffs Amid Trade War Pressures

Intel reported an $800 million loss last quarter and an $18.8 billion loss for 2024, marking its first annual loss since 1986, and is planning to cut spending and lay off potentially over 20% of its workforce. The company faces mounting challenges from rivals like Nvidia and TSMC, exacerbated by internal cultural problems and strategic missteps. Economic uncertainty and the U.S.-China trade war have led to a surge in demand for older, cheaper Intel chips, as customers shy away from newer, more expensive models and stockpile ahead of anticipated tariffs. China's threatened 85% tariff on U.S.-made chips could significantly impact Intel’s largest market and stall a PC sector recovery, despite optimism about AI devices and a Windows refresh. While recent earnings beat expectations due to stockpiling, Intel executives remain cautious, warning of increased operational costs and the risk of a global economic slowdown. The company’s future hinges on navigating trade tensions and balancing short-term demand with long-term innovation.