The demand for PC processors, Intel's primary product, is drastically declining, and the company has battled to regain market share it has lost to competitors.
According to the report, which cited people familiar with the situation, several divisions, notably Intel's sales and marketing group, might experience cuts affecting around 20% of the workforce.
As of July, the chip manufacturer employed 113,700 people.
The business intends to make the change around the same time as its third-quarter results release on Oct. 27, according to the sources, who requested not to be named because the discussions are private. The layoffs will be revealed as early as this month.
Intel stated during its second-quarter earnings call that it could make adjustments to its company to increase revenues.
"We are also lowering core expenses in calendar year 2022 and will look to take additional actions in the second half of the year," chief executive officer Pat Gelsinger said at the time.
The business forewarned that 2022 sales would be around $11 billion less than it had anticipated in July. Analysts forecast a third-quarter revenue decline of about 20%. Additionally, Intel's once-viable margins have shrunk: they are now around 15 percentage points smaller than average figures of about 60%.
People now purchase fewer PCs than they did during the pandemic-related lockdowns due to decades-high inflation and the reopening of offices and schools.
Chipmakers are also under pressure from COVID-19 restrictions in China, a major market for PCs, and the turmoil in Ukraine, which has slowed demand and clogged supply chains.
According to Gartner, worldwide shipments of desktop and laptop computers declined 19.5% in the third quarter of 2022 compared to the previous year. Gartner has tracked the market for more than two decades and this was the largest reduction they have seen.
HP, Dell Technologies, and Lenovo Group, all of which use Intel chips in their laptops and desktop PCs, experienced significant reductions.
On Tuesday, Gelsinger sent a memo to company employees describing ambitions to develop an internal foundry model for external clients and the company's product lines.
Since taking over as CEO of Intel last year, Gelsinger has been attempting to rebuild the organization's illustrious status in the Silicon Valley. It was a struggle even before the PC downturn, though. The long-held technological advantage of Intel was lost, and the company's management themselves admit that the culture of innovation has waned in recent years.
Now, a wider downturn is making those difficulties worse. The slowdown in technology expenditure is affecting Intel's PC, data center, and artificial intelligence businesses, which is hurting revenue and earnings.
