The talk of the tech world this week revolved around Intel Corp.’s confirmation that it would cut a significant number of jobs from its massive global workforce. The Intel job cuts impact was a main focus for theCUBE Research industry analysts John Furrier (pictured, left) and Dave Vellante (right) to dive into on the latest episode of the CUBE podcast.
The company announced a plan to cut 15,000 jobs, representing 15% of its total. It comes after last quarter’s dead cat bounce, according to Vellante.
“People were getting all excited, and you and I talked about this. We were like, the revenue’s dropped like 15% year-on-year. This quarter they missed their EPS by eight cents. They were targeting 10 cents, so there’s a big miss on EPS,” Vellante said. “Their revenue is down year-on-year. It continues to be down. They’re cutting their CapEx, they’re laying off people, they’re delaying some fabs.”
The Intel job cuts impact moving forward
It’s the same fundamentals that theCUBE has been discussing for years, according to Vellante. It includes the fact that PC volumes have peaked, and x86 as a percentage of the overall market is in decline.
“You have the fact that AMD is gaining share on Intel in x86. Then you add to that the attempts to compete with TSM and Samsung in Foundry,” Vellante said. “You’ve got the U.S. government trying to help out, but it’s a drop in the bucket, as we’ve talked about before, when you’re trying to open six fabs at $25 to $30 billion a piece. If they keep on this trajectory, they could go bankrupt.”
That’s why the company is ending the dividend and cutting employees, according to Vellante. All told, the Intel job cuts impact represents a significant and game-changing shift in the industry.
“It reminds me of when HP was going through that time when they were splitting, Dave. It’s like an icon of a company. Hewlett-Packard was the founder of Silicon Valley,” Furrier said. “If you’re going to go anywhere else and look at some of the big companies that really were part of the legacy, obviously you had the semiconductor industry, but Intel was that brand.”
The generational shift passed the ball to the Googles of the world, according to Furrier. That followed onto companies such as Meta Platforms Inc.
“You have these iconic, high-flying companies that were the DNA of these ecosystems. The [Intel job cuts impact is] just bad. It’s terrible,” Furrier added.
A possible surge of kernel developers
The Intel job cuts impact won’t be fully understood for some time. But it’s clear that the market is in a period of transition. For some time, theCUBE has been discussing how important it is to win in transition. Today, if one is a senior executive or a CEO of a big legacy company, if that company can’t win a big market transition, they’re in big trouble, according to Furrier.
“We are in a transition. The generative AI, system on a chip, kernel developers will be the new developers. You’re already seeing it,” he said. “All the successful gen AI companies are coding as close to the hardware and silicon as possible. That’s basically kernel developers.”
There’s going to be a surge coming of kernel-like developers, in Furrier’s view. That leaves a big opportunity in the market.
“Whoever moves to that market is going to make a lot of money and have a great job, by the way,” Furrier said.
Navigating the new data landscape
Supercloud 7: Get Ready for the Next Data Platform is now in the rear view mirror, an event that featured a great lineup of speakers. It also featured an Enterprise Technology Research flash survey of customers of Snowflake Inc. and Databricks Inc.
“It’s so obvious now what we’ve been saying is going to happen. The data model will flip upside down the data platform. New rules are being written as we speak,” Furrier said. “It is going to be not only in transition, it’s a jump ball. Who’s going to get it? Who is going to play in this market? Whoever gets this wins everything.”
The data reveals that everyone wants open table formats, according to Vellante. Open source is important, because companies don’t want to get locked in.
“But they don’t know how to govern it. So, there’s this emergent governance layer that’s really, really important, that folks want to apply to open table formats,” he said. “But everybody’s confused.”
That’s because of all the players that are out there. It’s a confusing landscape, according to Vellante.
“Customers are like, ‘Yeah, we want open table formats. We want open source. But we’re not going to go all-in without governance,’” he said.
Watch the full podcast below to find out why these industry pros were mentioned:
Pat Gelsinger, CEO of Intel
David Zinsner, CFO of Intel
Joe Biden, 46th United States president
Ben Bajarin, principal analyst and CEO of Creative Strategies
David Floyer, analyst emeritus at theCUBE Research
John Chambers, CEO of JC2 Ventures
Andy Grove, former president and COO of Intel
Michael Dell, chairman and CEO of Dell Technologies
Andy Jassy, president and CEO of Amazon
Charlie Giancarlo, CEO of Pure Storage
Charlie Kawwas, president at Broadcom
Mark Zuckerberg, CEO of Meta Platforms
Charles Fitzgerald, consultative strategist and investor
Matthew Prince, co-founder and CEO of Cloudflare
Satya Nadella, chairman and CEO of Microsoft
Jonathan Heiliger, general partner at Vertex Ventures US
Ali Ghodsi, co-founder and CEO of Databricks
Benoit Dageville, co-founder and president of product at Snowflake
Rob Strechay, managing director and principal analyst at theCUBE Research
Erik Bradley, chief strategist and director of research at ETR
Sanjeev Mohan, principal at SanjMo
Steve Jobs, co-founder and former chairman and CEO of Apple
Larry Ellison, chairman of the board and CTO of Oracle
Molham Aref, CEO of RelationalAI
Paul Gillin, enterprise editor at SiliconANGLE Media
Zeus Kerravala, founder and principal analyst at ZK Research
Matt Garman, CEO of AWS
Jeff Barr, VP and chief evangelist at AWS
Adrian Cantrill, cloud consultant and instructor at learn.cantrill.io
Don’t miss out on the latest episodes of “theCUBE Pod.” Join us by subscribing to our RSS feed. You can also listen to us on Apple Podcasts or on Spotify. And for those who prefer to watch, check out our YouTube playlist. Tune in now, and be part of the ongoing conversation.