Month: August 2024

AI is about to transform smartphones in a big way

August 2, 2024 /

On the heels of Apple rolling out an early preview of iOS 18.1 with its first generative AI (genAI) tools, IDC this week released a report saying nearly three-in-four smartphones will be running AI features in four years.

Apple first announced its plans to add AI features to devices through its Apple Intelligence platform at its developers conference in June. This week, Apple announced AI tools and Siri enhancements that will be exclusive to the iPhone 15 Pro and Pro Max, as well as later iPhones. Apple Intelligence will also be released on Macs running Apple Silicon M-series chips.

Over the next two years, the number of genAI-enabled smartphones is expected to grow quickly, though they’ll likely be limited to flagship devices like the iPhone 15 Pro, Google Pixel 8 Pro, and Samsung Galaxy Z Flip6 — and cost will be an issue.

“Capable chipsets don’t come cheap,” said Anthony Scarsella, IDC’s research director for mobile phones. “Over time, we believe these components will enter the mid-market and more affordable models as competition grows among device manufacturers and AI applications.”

Most high-end mobile processors now include an AI accelerator or neural processing unit (NPU). The Arm processor architecture provides an NPU component for licensees and mobile chips from Intel, Qualcomm, MediaTek, and Samsung have their own NPU implementations, according to Jack Gold, principal analyst with tech industry research firm J. Gold Associates.

AI on smartphones

Shutterstock/ImageFlow

“Right now it’s mostly in the high end of devices (e.g., high-end Snapdragon chips), but eventually they will migrate down to the lower end as well,” Gold said. “In the next two to three years, you will be hard pressed to find a mobile processor, except perhaps at the very low end for $100 smartphones, that doesn’t have AI acceleration built in.”

One of the biggest advantages of running genAI on smartphones is that user data never moves off the device — boosting both privacy and security — and locally running apps can benefit from the use of AI accelerations (e.g, audio, video, digital assistance, device management, etc.), according to Gold.

GenAI on mobile devices will automate certain functions, such as generating new messages and emails by choosing different conversational tones such as “friendly,” or “professional” or “concise”, for example. GenAI tools can also be used to pull bulleted points from digital conversations and generate bullet points in a “too long; didn’t read” (TLDR) format, for example.

“Search will always be a top priority and use case for mobile users,” Gold said. “AI-assisted search will not only be for cloud based search, like Google, but also on-device search like, ‘Where did I put that file and picture I took of my dog?’ Beyond that, help with pictures and video will be a major use (and already is) that helps mobile users create better pictures and video.”

For example, the Apple Intelligence platform will allow users to generate images from word prompts. Inputing the word “rooftop” will generate the image of a rooftop scene in a city, which can then be animated or illustrated andsent in a message. Siri, Apple’s voice assistant, will also use Apple Intelligence to better interpret voice commands and help ensure responses are accurate.

Additionally, general concierge-like services will become more widely available as smartphones using genAI learn more about users and their preferences.

GenAI will ‘will completely transform’ how we use phones

“While it is still too early to know all the use cases that will emerge in the coming years, one thing is for sure — genAI will completely transform the way we interact with our smartphones,” said Nabila Popal, senior research director with IDC’s Worldwide Tracker Team.

In its report, IDC said genAI smartphone shipments are forecast to reach 70% of the market by 2028. This year alone, AI-enabled smartphone shipments are expected to grow with more than 360%, representing 234.2 million phones. That represents 19% of the overall smartphone market in 2024.

As phones capable of running genAI features on the device become more popular, the potential for more personalized and proactive AI assistants becomes increasingly likely, IDC said. “This evolution, driven by consumer demand, application developments, and overall industry growth, promises to make the next decade the most exciting period for the smartphone market,” IDC said.

Experts see AI features and tools moving more to the edge — being embedded on smartphones, laptops and IoT devices — because AI computation is done near the user at the edge of the network, close to where the data is located, rather than centrally in a cloud computing facility or private data center.

Expect a migration from the cloud to the edge…

That’s why AI will migrate away from the cloud, according to Gold.

“We expect the largest portion of all AI workloads to migrate to the edge over the next few years, running close to the intended use case,” Gold wrote in a recent research report. “This is both for improved functionality and latency and increased privacy/security. It’s also necessary to offload the need for movement of large amounts of data to centralized computing platforms in the cloud or data center, which is expensive and impacts performance.”

Edge deployments will include running remote cloud instances on localized devices, so remote hyperscaler products should be well positioned for AI’s edge migration. “This presents a significant opportunity for AI expansion and for vendor fulfillment of systems and services,” Gold said.

Tiffany Yeung, an Nividia product marketing manager, wrote in a blog post that since AI algorithms are capable of understanding language, sights, sounds, smells, temperature, faces and other analog forms of unstructured information, “they’re particularly useful in places occupied by end users with real-world problems.”

GenAI smartphones that feature a system-on-a-chip (SoC) are capable of running on-device AI models more quickly and efficiently, according to IDC. And genAI smartphones can leverage NPUs with 30 tera operations per second (TOPS) — or more — using the int-8 data type, (in other words, an 8-bit integer).

…and bigger upgrade cycles

Despite sometimes long mobile refresh cycles and economic unknowns, genAI capabilities on smartphones will drive upgrade cycles and represent a significant opportunity for both hardware makers and app developers alike, IDC said.

“The dramatic growth seen in 2024 will carry into 2025, with shipments of genAI smartphones expected to grow 73.1% year over year. By 2028, IDC forecasts 912 million genAI smartphone shipments, resulting in a 2024-2028 compound annual growth rate (CAGR) of 78.4%.

“The rapid incorporation of genAI in smartphones is unprecedented in mobile history, with market penetration expected to exceed 60% within the first three years,” IDC’s Popal said. “However, the most significant impact of this evolution is anticipated in 2026, when mid-range devices are expected to adopt this technology, making a momentous leap towards the democratization of GenAI.”

Delta CEO: Windows is the ‘most fragile platform’

August 2, 2024 /

Apple beat expectations in its third quarter and has wind beneath its wings on strength of the recent Microsoft/Crowdstrike debacle that cost companies billions of dollars. The tide is turning, and turning fast. 

Regular readers will know we’ve been reporting on the steady rise of Apple in the enterprise over the last decade or so. By focusing on what users need, the company eventually built a platform for better business — and companies everywhere are migrating to Apple. Multiple data points show that given the choice, most people will choose an Apple product for work; the buoyant Apple enterprise ecosystem shows this.

Corporate America is upset 

During Apple’s financial call, we learned that American Express now has a growing fleet of more than 10,000 Macs, while insurance and financial services company USAA has begun provisioning its employees with Macs. 

“Turning to [the] enterprise, we continue to see businesses leveraging our entire suite of products to drive productivity and creativity for their teams and customers,” said Apple Chief Financial Officer Luca Maestri. 

This pattern will accelerate as executives deal with the fallout of the recent Crowdstrike outage. Parametrix estimates insured losses could reach $1 billion across Fortune 500 companies, though actual losses will be far, far higher: around $5.4 billion. 

The impact on healthcare was particularly significant. Patients saw operations cancelled while healthcare management saw $1.94 billion in damages, according to Parametrix. That is a lot of cash to lose. 

Windows, the most fragile platform — Delta

“When was the last time you heard of a big outage at Apple?” Delta CEO Ed Bastian asked CNBC, while characterizing Windows as “probably the most fragile platform.”

You can understand his annoyance. “We had 40,000 servers we had to physically touch and reset,” Bastian said, pegging the cost so far at half a billion dollars in five days. 

He seemed pretty unimpressed with the “free consulting” his company was offered in response to the disaster, which has had both financial and reputational damage to the firm. And now the airline faces a federal investigation into how it handled the outage created by Crowdstrike.

Delta has engaged counsel to seek damages and other impacted enterprises will probably take similar flights of action — though these may not succeed. (Even if they do, it is doubtful enterprises will in future agree to the same terms and conditions of sale.) CrowdStrike Shareholders have launched a class action suit, too. This story seems unlikely to end particularly well.

Follow the leader

Apple removed access to the kernel, which is what generated the problem, years ago. Microsoft has claimed the reason its OS is vulnerable to such attacks is the fault of a deal it reached with the European Commission.

In a triumph of pyrrhic marketing, it says that deal means it can’t provide an operating system as secure as Apple’s because it can’t remove developer access to the kernel. Microsoft’s report into the incident suggests the company might now move in the same direction.

However, even since Crowdstrike, business-damaging flaws in Microsoft 365 and Windows Server that have nothing to do with kernel access have emerged. These support Bastian’s claims around “fragility” and are a scale of magnitude worse than the few hours of lost iCloud Private Relay access some Apple customers have endured in the same time frame. There’s simply no comparison.

People can’t help but notice.

The enterprise is taking flight

Delta’s Bastian likely reflects what many C-class executives think at this juncture. They’ve lost money, feel uncompensated, and also know that when employees walked into work on Crowdstrike day, only the people using Macs kept working. 

People don’t forget things like that.

To some extent, the writing has been on the wall for a while. Think back to when then IBM CIO Fletcher Previn surprised everyone with news that even with their higher initial cost, Macs are cheaper to run than PCs. Previn is now at Cisco, his findings remain the same to the extent that the company is now 60% Mac. One big reason for the TCO advantage is the Macs’ relative stability and lower security and tech support costs — all of which were brightly illustrated by the Microsoft/Crowdstrike event.

All things in the balance, it looks very likely that when it comes to the switch to Apple systems, the enterprise is taking flight. Which will do no harm at all to Apple’s future revenues — and might actually improve business revenues for everyone else, as well.

More from Jonny Evans

Please follow me on Mastodon, or join me in the AppleHolic’s bar & grill and Apple Discussions groups on MeWe.

AI startup Suno says it can train its model using copyrighted music

August 2, 2024 /

Music label companies Universal Music Group, Warner Music Group and Sony Music Group sued AI startups Suno and Udio in June, arguing that the companies had trained their AI model by collecting copyrighted material from the internet.

Now, according to Engadget, Suno has confirmed that its AI model was indeed trained on copyrighted material from all three major music companies — but it argues the training counts as “fair use” under US law. This means the use of the material constitutes an exception to copyright regulations.

“It is fair use under copyright law to make a copy of a protected work as part of a technological process, which is invisible to the public, in order to create a new end product that is not infringing,” Suno wrote in a statement.

Not surprisingly, the music companies disagree. “Their industrial infringement does not qualify as ‘fair use,'” said a spokesperson for the music labels in response to Suno’s claims. “There is nothing fair about stealing an artist’s life’s work, extracting its core value and repackaging it to compete directly with the originals. The defendants had a legal way to bring their products and tools to market — to obtain consent before using their works, as many of their competitors have already done. Unfair competition is directly relevant in these cases.”

Court blocks US net neutrality reinstatement

August 2, 2024 /

Six years ago, the end of net neutrality in the US meant that carriers such as AT&T and Verizon were free to prioritize certain services at the expense of others.

Since becoming taking office in 2021, President Joseph R. Biden Jr.’s administration has been trying to reverse that decision and restore net neutrality. Those efforts hit another snag this week when the Sixth Circuit Court of Appeals decided to block the government’s plans to reinstate rules that were in place before 2018.

As a result, there will be no change before the presidential election in November.

“The American public wants an internet that is fast, open and fair. Today’s decision is a setback, but we will not give up the fight for net neutrality,” US Federal Communications Commission Chairman Jessica Rosenworcel said in a comment to the Reuters news agency.

Tech layoffs in 2024: A timeline

August 2, 2024 /

After two years of massive layoffs at IT companies, 2024 was expected to be a year of recovery for the IT industry. While there are early signs of that, with global IT spending expected to increase 8% to cross $5.1 trillion in 2024 according to Gartner, jobs continue to be impacted in the sector. Some of the layoffs being seen this year are an extension of job cuts announced in 2023.

Last year, tech giants including Amazon, Cisco, Facebook parent company Meta, Microsoft, Google, IBM, SAP, and Salesforce—as well as many smaller companies —announced sweeping job cuts.

The problem: Big Tech went on a hiring binge during the pandemic when lockdowns sparked a tech buying spree to support remote work and an uptick in e-commerce, and now they face revenue declines.

According to data compiled by Layoffs.fyi, the online tracker keeping tabs on job losses in the technology sector, 1,186 tech companies laid off about 262,682 staff in 2023, compared to 164,969 layoffs in 2022. In 2024, 168 tech companies have already laid off 42,324 employees.

Here is a list—to be updated regularly—of some of the most prominent technology layoffs the industry has experienced recently.

Tech layoffs in 2024

  • Intel
  • Dell
  • Cisco
  • Docusign
  • Microsoft
  • SAP
  • EBay
  • Google
  • Alphabet

August 1: Intel removes 15,000 roles

Intel plans to cut its workforce by around 15% to reduce costs after a disastrous second quarter. Revenue for the three months to June 29 stagnated at around $12.8 billion, but net income fell 85% to $83 million, prompting CEO Pat Gelsinger to bring forward a company-wide meeting in order to announce that 15,000 staff would lose their jobs. “This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history,” Gelsinger wrote in an email to staff, continuing: “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low. We need bolder actions to address both — particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

April 1: Dell acknowledges 13,000 job cuts

Dell Technologies’ latest 10K filing with the US Securities and Exchange Commission disclosed that the company had laid off 13,000 employees over the course of the 2023 fiscal year; it characterized the layoffs and other reorganizational moves as cost-cutting measures. “These actions resulted in a reduction in our overall headcount,” the company said. A comparison to the previous year’s 10K filing, performed by The Register, found that Dell employed 133,000 people at that point, compared to 120,000 as of February 2024. Dell announced layoffs of 6,650 staffers on Feb. 6, but it is unclear whether those cuts were reflected in the numbers from this year’s 10K statement.

Feb. 14: Cisco cuts 5% of workforce

Cisco will shed 4,200 of its 84,900 employees as it refocuses on more profitable areas of its business, including AI and security. The company’s last major round of layoffs was in November 2022. Cisco’s sales of telecommunications equipment have been hit by delays at telcos in rolling out equipment they havealready purchased. AI, on the other hand, is a growing business for Cisco, with AI-related sales in the billions—and that’s before it announced its recent partnership with Nvidia, which is making bank on sales of chips for AI applications. 

Feb. 6 DocuSign will lay off 6% of workforce in restructuring

Digital workflow company DocuSign will lay off 440 of its 7,336 staff as it seeks to cut costs. The lay-offs come amid reports that attempts to sell the company to investment firms have fallen apart after a failure to agree on price.

Jan. 25: Microsoft axes 1,900 workers in its gaming division

Roughly 8% of Microsoft’s Gaming division is headed for unemployment, the company announced Thursday, with the lion’s share of job cuts affecting the newly acquired Activision Blizzard subsidiary. Microsoft completed its purchase of Activision Blizzard in October 2023, paying nearly $69 billion. About 1,900 employees will be let go, along with two executives at Blizzard: Mike Ybarra and Allen Adham. A pending survival game title, according to Reuters, has also been cancelled. The layoffs were largely expected in the wake of the Microsoft acquisition.

Jan. 24: SAP announces $2.2B restructuring program that’ll impact 8,000 jobs

German enterprise software giant SAP said this week that 8,000 jobs will be “impacted” by a large-scale shift in company priorities towards generative artificial intelligence (genAI). It’s unclear how many of the affected employees will be laid off, as the company has said many of the impacts will involve “voluntary leave programs and internal re-skilling measures.” SAP said the restructuring will not result in an overall loss of headcount. The company cut more than 3,000 jobs in 2023. Analysts expect the move to skew SAP’s workforce younger and more expert in genAI.

Jan. 23: EBay slashes 1,000 jobs as expenses rise

Online retailer eBay plans to cut nearly 10% of its workforce—about 1,000 jobs—saying “in an official blog post that “headcount and expenses have outpaced the growth of our business.” All of the company’s US workforce was told to work from home Wednesday as the firings were carried out via Zoom. Additionally, eBay said it would “scale back” on its work with outside contractors in a further attempt to rein in costs. The company fired 500 workers last year after sales slackened in the wake of the pandemic boom, according to NPR.

Jan. 17: Google to replace part of ad sales team with AI

Google’s ad sales team lost several hundred staff from its large customer department, part of the company’s move to automate some jobs with machine learning. Reports suggest that more staffers from the ad sales team were also let go in October 2023. The company also laid off hundreds more employees from its digital voice assistant, Fitbit, and Pixel teams earlier in the week. Google has been steadily shedding jobs since January 2023, when parent company Alphabet downsized its entire workforce by 6% across the board, putting 12,000 people out of work.

Jan. 11: Alphabet lays off hundreds from engineering, hardware, and digital assistant teams

Alphabet announced that it is laying off hundreds of employees from several teams, including engineering and the teams responsible for its digital voice assistant and hardware products, including Fitbit wearable devices and Pixel smartphones. The reorganization of the hardware teams will see a consolidation of different teams responsible for different devices, such as Nest, Pixel, and Fitbit, combined under a single team, which will be responsible for all devices, the news portal reported, adding that the activity has also seen the departure of Fitbit co-founders James Park and Eric Friedman.

Tech layoffs in 2023

  • Broadcom
  • Amazon
  • Splunk
  • Stack Overflow
  • Qualcomm
  • Meta
  • Alphabet
  • Cisco
  • Oracle
  • Red Hat
  • …and more

Dec. 4: Twilio sheds jobs in third round of layoffs

Twilo’s third significant staff reduction in the past year saw the likely loss of 300-400 workers at the cloud communications company. The most heavily affected were workers in the sales teams for the company’s contact center software and consumer data products. Twilo said in a statement that the layoffs were necessary to “optimize” the company’s technology, data and analytics business for growth. The employees affected were given 12 weeks of salary as a severance package, plus additional pay for every year worked at the company. The costs of the layoffs and associated severance payments were estimated by Twilo at between $25 million and $35 million.

Dec. 1: Broadcom to lay off over 1,200 VMware employees as deal closes

Mere days after the final closing of Broadcom’s mammoth $69 billion acquisition of VMware, Broadcom laid off 1,267 VMware employees. The move had been long feared among VMware workers, according to multiple reports. The affected employees mostly worked at VMware’s Palo Alto offices, and a filing with the California Employment Development Department detailed that further job cuts were on the table. Stephen Elliot, a group vice president at IDC, said that the layoffs were likely to be greeted with approval by VMware’s customers and partners, and viewed as a refocusing of the company’s efforts.

Nov. 20: Amazon to cut jobs at Alexa unit to sharpen focus on generative AI 

Amazon confirmed that it is planning to lay off several hundred workers at its Alexa division as part of a shift in focus to generative AI. “As we continue to invent, we’re shifting some of our efforts to better align with our business priorities, and what we know matters most to customers—which includes maximizing our resources and efforts focused on generative AI,” the company said in a statement. Amazon has already undertaken multiple rounds of layoffs in the last 12 months and this is not the first time Amazon’s devices and services team, which includes those working on the company’s Echo devices and Alexa, has been cut back. Employees in this department were part of 18,000 jobs Amazon axed at the start of 2023.

Nov. 1: Splunk cuts 7% of workforce ahead of Cisco acquisition

Network management and visualization vendor Splunk announced it would be cutting about 560 jobs as part of a global restructuring. The announcement comes after Splunk announced a first wave of 325 job cuts in February. “The overall market has retracted and we expect the macro environment will continue to be unpredictable for the foreseeable future,” said Splunk president and CEO Gary Steele in message to employees. He added that the job cuts are unrelated to the company’s pending $28 billion acquisition by networking giant Cisco, which was initially announced in September of this year, stating that the changes were simply the continuation of “important initiatives” Splunk has undertaken to align its resources and operating structure.

Oct. 19: Nokia to cut 14,000 jobs in an attempt to salvage falling profits

Telecom giant Nokia announced it will be cutting up to 14,000 jobs, a decision it blamed on the slowing demand for 5G equipment. The news comes after the company reported that its third-quarter net sales declined by 20% year-on-year, with profit over the same period dropping by 69%. Nokia said that as a result, it will be implementing cost-cutting measures to try and save between $842 million and $1.2 billion by 2026, eliminating $422 million worth of costs in 2024 and a further $316 million in 2025.

Oct. 16: Generative AI forces Stack Overflow to lay off 28% of its workforce

Stack Overflow said it was laying off nearly a third of its workforce to replace it with generative AI-driven coding assistants, such as Microsoft Copilot, Amazon CodeWhisperer, and Google Bard. The downsizing activity, which impacted the go-to-market and support teams, was a result of the company’s strategy to focus on its products and move toward profitability, especially at a time when macroeconomic conditions are uncertain, company CEO Prashanth Chandrasekar wrote in a blog post.

Oct. 13: Qualcomm to lay off 1,258 employees from its California offices

Qualcomm is set to cut 1,258 employees by December this year, according to filings made to the state’s Employment Development Department. Layoffs at the chipmaking giant will affect its San Diego and Santa Clara offices and encompass roles such as engineers, analysts, software developers, and employees in finance, legal, and human resources. These job reductions are a response to the company’s recent financial struggles, with revenue down 23% year-on-year and net income down 52% for the quarter ending June.

Oct. 4: Meta to lay off staffers at its Facebook Agile Silicon Team: Report

Facebook’s parent, Meta, laid off employees from its metaverse custom silicon unit, affecting Facebook’s Agile Silicon Team or FAST, according to a Reuters report. FAST is home to nearly 600 Facebook employees, according to the report. The job cuts at FAST come just days after the company released its Quest 3 mixed reality headsets, which are expected to offer a metaverse play.

Sept. 15: Low-code platform provider Airtable enacts new round of layoffs

Airtable, a low-code software company, underwent its second round of layoffs within nine months, cutting around 237 employees, equivalent to 27% of its workforce. CEO Howie Liu explained that these measures aim to target large enterprise clients and regain control over spending. This move follows a similar downsizing effort in December 2022, which affected 254 employees. Airtable anticipates achieving cash-flow positivity after these layoffs. The decision reflects a post-pandemic shift from hypergrowth to a more sustainable business model.

Sept 14: Alphabet layoffs: Company trades recruitment team for tech talent

Alphabet, the parent company of Google, initiated another round of layoffs, this time affecting hundreds of employees within its recruiting team. The move is part of Alphabet’s ongoing efforts to streamline its operations and increase efficiency amid economic uncertainties. The tech giant is grappling with fierce competition from industry rivals like Microsoft, AWS, IBM, and Oracle, particularly in the field of generative AI and artificial intelligence. In a strategic shift, Alphabet is focusing its workforce toward engineering and technical roles, reflecting a broader trend in the tech industry.

August 14: SecureWorks lays off 15% of workforce

Cybersecurity company SecureWorks announced it is laying off 15% of its workforce, around 300 employees. This constitutes the second round of layoffs enacted by company this year, with the company announcing a 9% reduction in the size of its workforce in February. In a regulatory filing, SecureWorks said that it would incur about $14.2 million in expenses due to the layoffs, mostly related to employee termination benefits and real-estate costs. “We are announcing actions to simplify and scale our business and to deliver profitable growth,” wrote CEO Wendy Thomas in an email to employees on August 14, adding that the company would be “continuing to invest in the growth of our business, aligned to our strategic priorities.”

August 8: Cybersecurity company Rapid7 cuts 18% of workforce

US cybersecurity firm Rapid7 announced plans to lay off 18% of its workforce, approximately 400 global employees. “As we accelerate our delivery of the leading security operations solution and service platform experience to customers, we have determined it is necessary to restructure our operations, including the difficult decision to reduce our team in the near term,” CEO Corey Thomas said in a letter to staff. In a regulatory filing with the SEC, Boston-based Rapid7 estimated that the restructuring plan will incur costs of between $24 million-$32 million in charges and will be “substantially complete” by the end of the fourth quarter of 2023. The company added that it also plans to permanently close a number of undisclosed office locations as a result of the restructuring, which will cost an additional $4 million. The announcement was made in tandem with Rapid7’s 2023 second quarter financial results, where the company reported a loss of $66.8 million during the three-months ending June 30.

July 20: Cisco says this week’s layoffs were announced last November

Networking giant Cisco Systems announced another round of layoffs. Despite employees viewing the move as fresh cuts, the company clarified that these layoffs were part of the restructuring plan announced in November 2022, which included eliminating around 5% of its 83,000 workforce. The reduction aims to rebalance the organization and prioritize investments in key areas, Cisco said. Cisco reiterated that the layoffs aren’t solely driven by cost savings, but by the need to adapt to the changing technology landscape. The company plans to support affected employees with generous severance packages and assistance in finding new roles. However, disgruntled employees expressed dismay, highlighting the impact of losing jobs regardless of whether they were previously announced.

July 8: Evernote lays off US, Chile staff as it moves to Europe

Evernote, the maker of the note-taking app of the same name, is laying off most of its staff in the US and Chile and moving to Italy, the home of its corporate parent, Bending Spoons. “Going forward, a dedicated (and growing) team based in Europe will continue to assume ownership of the Evernote product,” company CEO Francesco Patarnello said in a message to employees. He did not specify the number of staff to be laid off, but said that affected employees in most cases will receive 16 weeks of salary, up to one year of health insurance coverage, and a performance bonus. Bending Spoons, which acquired Evernote in November last year, had enacted a round of layoffs in February that affected more than 100 employees.

June 16: Despite growth, Oracle reported to cut jobs at Cerner healthcare unit

Oracle laid off hundreds of employees and rescinded job offers for its Cerner healthcare unit, acquired earlier this year for $28 billion, according to a report by Insider. The layoffs were reportedly due to problems with Cerner’s project for the US Department of Veterans Affairs Office. The VA has raised concerns about technical glitches and patient safety issues with its new electronic health record system, and the layoffs cast a shadow over Oracle’s optimistic outlook for Cerner. Company executives expect Cerner to be a crucial factor in future growth, considering the healthcare industry’s ongoing digital transformation as the sector adopts electronic healthcare records. Just days before the Cerner layoffs came to light, Oracle announced that quarterly cloud revenue experienced a significant surge, increasing 54% year-over-year and contributing to record sales for the fiscal year.

June 1: Zendesk to lay off another 8% of its staff, cites macroeconomic issues

CRM software provider Zendesk implemented a new round of layoffs, reducing its workforce by a further 8% due to ongoing macroeconomic uncertainty and increased competition from rivals. The move came just six months after the company laid off 300 employees for similar reasons. CEO Tom Eggemeier announced the decision in an email to all employees, which was later posted as a blog. Eggemeier highlighted the need to align the company’s employee structure with customer goals, as enterprise customers consider adopting newer technologies like generative AI. Eggemeier said he believes Zendesk has an opportunity to lead in the new era of intelligent customer experience (CX), with solutions such as Zendesk AI and Conversational Commerce.

May 11: Developer-focused portal Stack Overflow lays off 10% of staff

Stack Overflow, the question-and-answer portal for developers, announced that it will lay off 10% of its workforce, affecting at least 58 employees. The job cuts come as the company shifts its focus to profitability amid macroeconomic concerns, according to a blog post by CEO Prashanth Chandrasekar. Affected employees include UX designers, HR professionals, product designers, and senior software developers. To improve profitability, Stack Overflow plans to launch AI and ML-based offerings in the coming months. This move is likely in response to demand from enterprises for generative AI and natural language processing capabilities, as vendors like AWS, IBM, and Google have launched new product offerings in this space.

May 9: LinkedIn lays off 716 staffers, to shut China job app

Employment-focused social media platform LinkedIn on Tuesday said it would let go of 716 staffers as it shuts down a job search app in China and prepares for tapering revenue growth.  According to a letter to employees from CEO Ryan Roslansky, the layoffs were designed to reorganize the company and become more agile. He noted that the company had experienced shifts in customer behavior and slower revenue growth in recent months. In addition to the layoffs, the company will spin up 250 new roles in specific segments of its operations, new business, and account management teams starting May 15. The company will also phase out the local job app InCareer by August 9, 2023, as part of its business strategy changes in China.

May 4: Cognizant cuts 3,500 jobs in post-COVID, hybrid work restructuring plan

Technology services and consulting company Cognizant is set to cut around 1% of its global workforce, or approximately 3,500 employees, in a bid to reduce costs. Despite posting a 3% increase in net profit year-on-year for its most recent quarter, Cognizant CEO Ravi Kumar said the company was monitoring an uncertain macroeconomic environment and potential shifts in client priorities. The job cuts are part of the company’s NextGen program, which aims to simplify its operating model and realign office space. Cognizant has not confirmed where the affected workers are based, but it did say the cuts would mostly affect non-billable roles. In a statement, Cognizant said the changes reflect the post-pandemic hybrid work environment, and its drive for simplification includes operating with fewer layers to enhance agility and enable faster decision-making.

April 27: Dropbox lays off 16% of staff to refocus on AI, as sales growth slows

Facing a slowdown in revenue growth, cloud storage company Dropbox announced that it is laying off 500 employees, or 16% of its workforce, mainly in order to be able to hire staff with AI expertise. Although revenue for the fourth quarter last year—the last quarter for which Dropbox reported earnings—was up by 5.8% year over year to $598.8 million, the company has experienced a slowdown in sales recently. Meanwhile, in order to stay competitive, the company needs to ramp up its AI capabilities, CEO Drew Houston said in a note to employees.

April 24: Red Hat cuts 4% of global staff

Enterprise Linux giant Red Hat announced it will lay off almost 4% of its global staff, or about 800 workers, noting that the cuts will affect general administrative staff, not technical workers or sales people. The company has helped boost sales for corporate parent IBM, which reported that in the first quarter of the year, Red Hat revenue jumped 8% year over year. Despite the sales growth Red Hat CEO Matt Hicks said that a staff restructuring was necessary to ramp up efforts to bolster the company’s open hybrid cloud strategy, particularly for the industries including  telecommunications and automotive.

April 20: Technical teams hit by Meta’s latest wave of layoffs

Facebook’s parent company, Meta, initiated another round of  layoffs. These were previosuly announced—the difference this time is that many of the cuts reportedly affect technical employees. The latest wave of job cuts will see approximately 4,000 employees laid off from the company, including those in user experience, software engineering, graphics programming, and gameplay programming. The timeline for the cuts may differ, depending on the locations employees, Meta said. Instagram, a Meta subsidiary, is also downsizing or relocating UK-based staff, with the app’s head, Adam Mosseri, moving back to the US.

March 30: Kyndryl lays off staff in search of efficiency

Kyndryl, the managed IT services provider that spun out of IBM, announced layoffs affecting its internal IT services to streamline operations and become more competitive. The exact number of affected employees was not disclosed, but anonymous comments on job-loss monitoring website The Layoff.com suggested that staff in IT asset management roles and Kyndryl’s own CIO organization were among those let go. Kyndryl, which employs 90,000 globally, has been facing declining revenue and slow growth since its separation from IBM.

March 23: Accenture to lay off 19,000 to cut costs amid economic uncertainty

IT services and consultancy firm Accenture announced it would lay off 19,000 employees, or 2.5% of its workforce, over the next 18 months to reduce costs amid uncertain economic conditions. Tech workers were expected to be largely spared though, as the company said the cuts would primarily affect non-billable corporate functions. The decision came as demand for services stabilized following post-pandemic growth, and Accenture also lowered its fiscal year 2023 revenue growth forecast. Despite the reduced forecast, Accenture’s diversified business and industry mix is expected to provide stability for the tech services giant.

March 20: Amazon to lay off 9,000 more workers, including some at AWS

Amazon said it plans to lay off about 9,000 more workers from several business units, including AWS, PXT (People Experience and Technology, the company’s HR arm), Advertising, and Twitch. The announcement came two months after Amazon unveiled plans to lay off 18,000 employees. AWS is a big revenue generator for Amazon but has not been immune to current macroeconomic conditions. Revenue growth slowed sharply in the fourth quarter of 2022, to 20% in year-on-year terms. That’s well below the 27.5% and 33% figures seen in the previous two quarters. 

March 14: Meta cuts an additional 10,000 jobs from global workforce

Four months after social media giant Meta confirmed that it would cut 13% of its global workforce—amounting to 11,000 jobs—the company announced a further 10,000 layoffs. Additionally, Meta said that it would leave 5,000 currently empty roles unfilled. Founder and CEO Mark Zuckerberg cited difficult macroeconomic conditions and a focus on “flattening” the company’s organizational structure as key factors in the decision to cut more staff.

March 7: Atlassian lays off 5% of staff to refocus on cloud, ITSM

Collaboration software company Atlassian said that it plans to fire 500 employees, or around 5% of its overall workforce. The Australia-based company said that the job losses were organizational, and not driven by a need to cut costs—despite posting a net loss in its February financials, Atlassian saw its revenue grow 27%, to $873 million in the last quarter.

Feb. 27: Twitter stealthily lays off 10% of remaining workers, including tech staff

This round of Twitter layoffs saw the embattled social media platform lose 10% of its remaining workers, as about 200 were fired. The layoffs included startup founders whose companies had been absorbed by Twitter, including Esther Crawford, most recently the head of Twitter Blue. Twitter has fewer than 2,000 workers left on staff, down from about 7,500 just before Elon Musk bought the company in late October 2022.

Feb. 13: Twilio announces fresh round of layoffs, impacting 17% of its workforce

Twilio announced that it would slash its workforce by roughly 1,400, months after laying off an additional 816 during the fourth quarter of 2022. The cloud communications company said also that it would reorganize internally, creating two new business units, Twilio Communications and Twilio Data & Applications, in an official blog post. Before these two recent rounds of layoffs, the company employed nearly 9,000 workers.

Feb. 10: Microsoft cuts HoloLens, Xbox, Surface jobs as industrial metaverse team said to fold

Microsoft confirmed that it is cutting employees working on its HoloLens, Surface laptop and Xbox products, as reports surfaced that the tech giant will be laying off 100 employees working for its industrial metaverse team and closing that unit. The move to cut staff working on HoloLens and in its industrial metaverse team came as a surprise since the the company had made recent moves to expand efforts to move its augmented reality,  virtual reality and metaverse initiatves from the consumer to the enterprise side. In a statement, though, Microsoft said it was committed to the industrial metaverse. The company did not specify how many jobs it would cut in those areas, though a Worker Adjustment and Retraining Notification (WARN) from Washington state Friday noted that Microsoft had reported that 617 employees would be laid off in Redmond, Bellevue and Issaquah.

Feb. 10: Yahoo to lay off 20% of its staff as it cuts advertising tech business

Yahoo said it will lay off about 20% of its staff, or apporximately 1,600 workers, by the end of year, according to media reports confirmed by the company. The move is aimed at restructuring the company’s advertising technology business unit and reallocating its finances more efficiently. The layoffs mark the end of Yahoo’s attempts to be a direct competitor to Google and Meta in the digital advertising market.

Feb. 9: GitHub lays off 10% workforce, plans to go fully remote to cut costs

Microsoft-owned software development and version control service provider GitHubowned by Microsoft said it would be cutting 10% of its workforce, or about 300 employees, and moving  the remaining staff to remote work in order to safeguard the company’s immediate financial stability.

The layoffs came about a month after the company enacted a hiring freeze.

Feb. 7:  Zoom lays off 15% of its workforce after growth spurt during pandemic

Cloud-based videoconferencing service provider Zoom said that it was laying off 15% of its workforce, fearing uncertain macroeconomic conditions. The move came after the company went on a hiring spree during the pandemic.

In addition, Zoom said it is also making changes in team structure and several members of its leadership team will take pay cuts.

Feb. 6: Dell Technologies to lay off 6,650 staffers

 Due to declining PC sales and infrastructure requirements, Dell Technologies said it would lay off 6,650 workers, or about 5% of its total workforce. In addition to the downsizing, Co-Chief Operating Officer Jeff Clarke said the company would introduce changes that include changing the structure of its sales team and integrating the services division of its consumer and infrastructure businesses.

Feb. 2: Splunk to lay off 4% of its workforce to reduce costs

In a company filing with the US Securities and Exchange Commission (SEC), Splunk said it would be laying off 4% of its workforce as part of broader measures to optimize costs and processes ahead of uncertain macroeconomic conditions. The decision to downsize will affect 325 employees at the company, mostly in the North America region.

Feb. 1: PayPal to lay off 2,000 employees

In a message shared with PayPal employees and posted on the company’s online newsroom, PayPal President and CEO Dan Schulman said the company was set to cut 2,000 jobs, about 7% of its workforce.

Although the company beat analyst expectations in November when it reported its third quarter financial results, PayPal downgraded its forecast for the fourth quarter, citing a challenging macro environment and slowing e-commerce trends.

Jan. 26:  SAP announces 2,800 job cuts, says they’re unrelated to over-hiring or performance

Despite revenue rising 11% in 2022, during an announcement about its fourth quarter financial results, SAP said that due to net income dropping by 68%, the company would be undertaking some restructuring, resulting in layoffs.

Whereas companies such as Google or Salesforce announced across-the-board layoffs based on performance review criteria to reverse over-hiring during the pandemic period, CEO Christian Klein said that the job cuts are part of “a targeted restructuring” and not performance-based.

“We definitely didn’t over-hire,” Klein said, noting that revenue grew faster than SAP employee growth in 2022.

Jan. 26: IBM cuts 3,900 remaining employees after double asset disposal

After spinning off most of its infrastructure management division as a new business, Kyndryl, in November 2021, and selling some assets of its Watson Health business in January 2022, on the same day as IBM’s Q4 2022 results were announced, the company said it was eliminating 3,900 job roles, or 1.5% of its global workforce.

On a conference call with analysts to discuss the results, CFO Jim Kavanaugh didn’t directly mention the job cuts, instead alluding vaguely to the situation by acknowledging the business would have some “stranded costs” to address in early 2023, resulting in a “modest” charge of about $300 million

Later that day, in an interview with Bloomberg, Kavanaugh explained that those stranded costs related to staff left with nothing to do following the asset disposals and as a result, they would be laid off from the company.

In a statement, a spokesperson for IBM said it was important to note the charge is entirely related to the Kyndryl spinoff and healthcare divestiture.

Jan. 20: Google announces it’s cutting 12,000 jobs globally

Google’s parent company Alphabet announced it was cutting 12,000 jobs, around 6% of its global workforce. An internal memo from Sundar Pichai said that he takes “full responsibility for the decisions that led us here.”

The company will be paying affected employees at least 16 weeks of severance and six months of health benefits in the US, with other regions receiving packages based on local laws and practices.

The news comes four months after Alphabet posted lower-than-expected numbers for its third financial quarter, where it fell behind both revenue and profit expectations. However, while overall revenue growth slowed to 6% in the quarter for Alphabet, Google Cloud grew 38% year-on-year to $6.9 billion.

Jan. 18: Microsoft CEO Satya Nadella confirms plan to lay off 10,000 workers

On Jan. 18, Microsoft CEO Satya Nadella confirmed in a blog post that the company would be cutting almost 5% of its workforce, impacting 10,000 employees. 

The chief executive chalked up the downsizing maneuver to aligning its cost structure with its revenue structure while investing in areas that the company predicts will show long-term growth.

The Seattle-based tech giant reported its slowest growth in five years for the first quarter of its fiscal 2023, due largely to a strong US dollar and an ongoing decline in personal computer sales, causing net income to fall by 14% to $17.56 billion from this time last year. Rising cloud revenue helped to soften Microsoft’s growth slowdown.

Jan. 16: Google-backed ShareChat lays off 20% of staff

Google-backed, India-based social media startup ShareChat said it is laying off 20% of its workforce to prepare for oncoming economic headwinds.

“The decision to reduce employee costs was taken after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year,” a spokesperson said.

The move is expected to impact over 400 employees out of the company’s approximately 2,200 staffers. The company did not disclose the roles and the exact number of workers affected by the decision.

Jan. 13: Alphabet robotics subsidiary Intrinsic lays off 20% of staff

Alphabet, Google’s corporate parent, also announced there would be layoffs at its Mountain View, California-based robotics subsidiary Intrinsic AI, eliminating around 20% of its workforce or roughly 40 employees.

“This (downsizing) decision was made in light of shifts in prioritization and our longer-term strategic direction. It will ensure Intrinsic can continue to allocate resources to our highest priority initiatives, such as building our software and AI platform, integrating the recent strategic acquisitions of Vicarious and OSRC (commercial arm Open Robotics), and working with key industry partners,” according to a company statement.

Jan. 12: Alphabet-owned Verily cuts 15% of workforce

Verily—a life sciences firm also owned by Alphabet and headquartered in San Francisco—is downsizing its workforce by 15% to simplify its operating model. The move comes just months after the company raised $1 billion.

According to an email sent by CEO Stephen Gillett to all its employees, the downsizing is part of the company’s One Verily program, which aims to reduce redundancy and simplify operational aspects within the company.

As part of the new One Verily program, the company said it will move from multiple lines of business to one centralized product organization with increasingly connected healthcare systems.

Jan. 11: Informatica to lay off 7% of its workforce to cut costs

Enterprise data management firm Informatica announced plans to lay off 7% of its total workforce through the first quarter of 2023, the company said in a filing with the US Securities and Exchange Commission.

The move by Informatica, headquartered in Redwood City, California, will incur nonrecurring charges of approximately $25 million to $35 million in the form of cash expenditures for employee transition, notice period, severance payments and employee benefits, the company filing showed.

The company said it expects the layoffs to be completed by the first quarter of 2023 but added that there might be limited exceptions.

Jan. 4: Salesforce to cut 8,000 in restructuring plan

At the beginning of 2023, San-Francisco based Salesforce announced it will lay off about 10% of its workforce, roughly 8,000 employees, and close some offices as part of a restructuring plan.

In a filing with the US Securities and Exchange Commission (SEC), the company disclosed that its restructuring plan calls for charges between $1.4 billion and $2.1 billion, with up to $1 billion of those costs being shouldered by the company in the fourth quarter of 2023.

In a letter sent by Salesforce’s co-CEO Marc Benioff and attached to the SEC filing, he told employees that as Salesforce’s revenue accelerated through the pandemic, the company over-hired and can no longer sustain its current workforce size due to the ongoing economic downturn. “I take responsibility for that,” Benioff said.

Jan. 4: Amazon confirms more than 18,000 employees to be laid off

Seattle-based tech behemoth Amazon said it would be laying off more than 18,000 staff, with the bulk of job cuts coming later this month. The news confirmed a December Computerworld article reporting that Amazon layoffs were expected to mount to about 20,000 people at all levels While several teams are impacted, the majority of the job cuts will be in the Amazon Stores and People, Experience, and Technology (PXT) organizations.

According to a note from CEO Andy Jassy, the layoffs are a result of “the uncertain economy.” He also said that Amazon had “hired rapidly over the last several years,” but added that the layoffs will help the company pursue more long-term opportunities with a stronger cost structure.

Intel fires 15,000 employees as it intensifies focus on AI

August 2, 2024 /

Intel is making a strategic shift toward AI as it grapples with significant financial difficulties, including an 85% year-on-year drop in second-quarter profit. The company has also announced that it’ll slash over 15,000 jobs as part of its effort to reallocate resources toward AI technology.

In light of ongoing financial struggles and escalating competition from AMD and Nvidia in the AI chip market, Intel is intensifying its investment in the development of next-generation AI chips and the expansion of its chip fabrication capabilities.

This strategic pivot comes as Intel aims to reverse its financial misfortunes and strengthen its position in the competitive AI landscape.

For the quarter ending June 29, Intel reported revenue of $12.8 billion, marking a 1% decline compared to the previous year. Its net income plummeted 85% to $83 million, reflecting the financial strain faced by the company.

In comparison, AMD recently announced impressive earnings with a 9% increase in revenue to $5.8 billion and a 19% rise in net income to $1.1 billion, driven by strong AI data center chip sales. The tech giant is leveraging its AI advancements to enhance its market position, drive growth, and improve financial stability.

Revenue from AI and data center business was down by 3% in the quarter from the corresponding quarter a year ago to clock $3 billion. In the previous sequential quarter, the business unit was seen growing at 5% year-over-year.

“Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI,” Intel CEO Pat Gelsinger said in a note to employees. “Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

Analysts and industry watchers, however, seem to be a bit apprehensive.

“If Intel has to run faster, it will have to shed some fat in order to do so in this AI race,” pointed out Neil Shah, VP for research and partner at Counterpoint Research. “Intensified competition in both the client and data center businesses has widened the gap between revenues and operating costs, which is proving detrimental to Intel.”

“Intel has been directionally wrong for over two decades now,” said Faisal Kawoosa, founder and chief analyst at Techarc. “It once used to be an innovator, trendsetter, and industry leader.”

For about two decades, Intel has been following others instead of trying to lead the market, he said. “It should have been taking the AI bait at least a decade back in terms of a strategic shift.”

AI to the rescue

The investments in AI PC chips along with foundry services will pay off in the long run, Gelsinger said.

“The plan will enable the next phase of our multiyear transformation strategy,” Gelsinger said answering analysts’ queries in the earnings call. “We are focused on reducing operating expenses, capital expenditures, and cost of sales while maintaining core investments to execute our strategy.”

Intel’s planned transformation includes advancements in its AI-driven product lines.

“Intel continues to define and drive the AI PC category, shipping more than 15 million AI PCs since December 2023, far more than all of our competitors combined,” Gelsinger noted in  news release.

The company said that it is “on track to ship more than 40 million AI PCs by year-end.”

“Lunar Lake, our next-generation AI CPU, achieved production release in July 2024, ahead of schedule, with shipments starting in the third quarter. Lunar Lake will power over 80 new Copilot+ PCs across more than 20 OEMs,” the news release added.

“The AI portfolio roadmap looks solid in terms of Lunar Lake for AI PC, Granite Rapids, Clearwater Forest on 18A node for Datacenters and Gaudi 3 for GPUs AI servers,” Shah added. “However,” he noted, “to catalyze this AI roadmap, Intel will have to be leaner and meaner. Investment in AI software, toolsets to optimize the models for the Intel silicon and make it easier for developers to accelerate time to market should be the key focus from the savings coming from cost-reduction measure.”

 It will take at least two to three years for Intel to turn around from the position right now, Shah pointed out.

“It’s essential for them to focus on this exploding opportunity,” Kawoosa said.  “But historically we have seen it’s very difficult to catch up for anyone in the tech world. So, I am little hopeful of anything significant coming out of it.”

In the data center market, Intel introduced its next-generation Intel Xeon 6 processor with Efficient-cores (E-cores), code-named Sierra Forest, marking the company’s first Intel 3 server product architected for high-density, scale-out workloads.

“Our Intel Gaudi 3 AI accelerator is also on track to launch in the third quarter and is expected to deliver roughly two times the performance per dollar on both inference and training versus the leading competitor,” Gelsinger said during the earnings call.

Intel’s foundry operations are also evolving to support its AI ambitions. According to the company, it is nearing the completion of its five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025.

“In July 2024, we released to foundry customers the 1.0 PDK for Intel 18A. Our first two Intel 18A products, Panther Lake for client and Clearwater Forest for servers, are on track to launch in 2025,” Gelsinger added.

Cost reduction strategies and efficiency goals

“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” Gelsinger said during Thursday’s earnings call. “Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation.”

“These actions,” Gelsinger added, “combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability, and create shareholder value.”

During the earnings call, Intel’s Chief Financial Officer, David Zinsner, elaborated on the financial headwinds and the strategic steps being taken.

“Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher-than-typical charges related to non-core businesses, and the impact from unused capacity,” Zinsner said. “By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet.”

Zinsner expects these actions to “meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders.”

Intel’s cost-reduction plan is comprehensive. The company announced a series of initiatives to create a sustainable financial engine that accelerates profitable growth and enables further operational efficiency and agility.

These actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates.

“Lean operations will give Intel additional resources as well as timeshare to focus on AI than remain entangled in legacy products where with this kind of overhead costs they can only expect incremental growth,” Kawoosa said, adding “Intel needs a big bang to come back.”

By focusing on AI, Intel aims to not only regain its technological leadership but also to create a more resilient and profitable business model. As Intel takes these steps, the company is positioning itself to emerge stronger and more competitive in the AI era.

“Some non-core, less profitable businesses which could be a distraction, could also see divestments or spinoffs,” Shah added.

Intel fires 15,000 employees as it intensifies focus on AI

August 2, 2024 /

Intel is making a strategic shift toward AI as it grapples with significant financial difficulties, including an 85% year-on-year drop in second-quarter profit. The company has also announced that it’ll slash over 15,000 jobs as part of its effort to reallocate resources toward AI technology.

In light of ongoing financial struggles and escalating competition from AMD and Nvidia in the AI chip market, Intel is intensifying its investment in the development of next-generation AI chips and the expansion of its chip fabrication capabilities.

This strategic pivot comes as Intel aims to reverse its financial misfortunes and strengthen its position in the competitive AI landscape.

For the quarter ending June 29, Intel reported revenue of $12.8 billion, marking a 1% decline compared to the previous year. Its net income plummeted 85% to $83 million, reflecting the financial strain faced by the company.

In comparison, AMD recently announced impressive earnings with a 9% increase in revenue to $5.8 billion and a 19% rise in net income to $1.1 billion, driven by strong AI data center chip sales. The tech giant is leveraging its AI advancements to enhance its market position, drive growth, and improve financial stability.

Revenue from AI and data center business was down by 3% in the quarter from the corresponding quarter a year ago to clock $3 billion. In the previous sequential quarter, the business unit was seen growing at 5% year-over-year.

“Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI,” Intel CEO Pat Gelsinger said in a note to employees. “Our costs are too high, our margins are too low. We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

Analysts and industry watchers, however, seem to be a bit apprehensive.

“If Intel has to run faster, it will have to shed some fat in order to do so in this AI race,” pointed out Neil Shah, VP for research and partner at Counterpoint Research. “Intensified competition in both the client and data center businesses has widened the gap between revenues and operating costs, which is proving detrimental to Intel.”

“Intel has been directionally wrong for over two decades now,” said Faisal Kawoosa, founder and chief analyst at Techarc. “It once used to be an innovator, trendsetter, and industry leader.”

For about two decades, Intel has been following others instead of trying to lead the market, he said. “It should have been taking the AI bait at least a decade back in terms of a strategic shift.”

AI to the rescue

The investments in AI PC chips along with foundry services will pay off in the long run, Gelsinger said.

“The plan will enable the next phase of our multiyear transformation strategy,” Gelsinger said answering analysts’ queries in the earnings call. “We are focused on reducing operating expenses, capital expenditures, and cost of sales while maintaining core investments to execute our strategy.”

Intel’s planned transformation includes advancements in its AI-driven product lines.

“Intel continues to define and drive the AI PC category, shipping more than 15 million AI PCs since December 2023, far more than all of our competitors combined,” Gelsinger noted in  news release.

The company said that it is “on track to ship more than 40 million AI PCs by year-end.”

“Lunar Lake, our next-generation AI CPU, achieved production release in July 2024, ahead of schedule, with shipments starting in the third quarter. Lunar Lake will power over 80 new Copilot+ PCs across more than 20 OEMs,” the news release added.

“The AI portfolio roadmap looks solid in terms of Lunar Lake for AI PC, Granite Rapids, Clearwater Forest on 18A node for Datacenters and Gaudi 3 for GPUs AI servers,” Shah added. “However,” he noted, “to catalyze this AI roadmap, Intel will have to be leaner and meaner. Investment in AI software, toolsets to optimize the models for the Intel silicon and make it easier for developers to accelerate time to market should be the key focus from the savings coming from cost-reduction measure.”

 It will take at least two to three years for Intel to turn around from the position right now, Shah pointed out.

“It’s essential for them to focus on this exploding opportunity,” Kawoosa said.  “But historically we have seen it’s very difficult to catch up for anyone in the tech world. So, I am little hopeful of anything significant coming out of it.”

In the data center market, Intel introduced its next-generation Intel Xeon 6 processor with Efficient-cores (E-cores), code-named Sierra Forest, marking the company’s first Intel 3 server product architected for high-density, scale-out workloads.

“Our Intel Gaudi 3 AI accelerator is also on track to launch in the third quarter and is expected to deliver roughly two times the performance per dollar on both inference and training versus the leading competitor,” Gelsinger said during the earnings call.

Intel’s foundry operations are also evolving to support its AI ambitions. According to the company, it is nearing the completion of its five-nodes-in-four-years strategy, with Intel 18A on track to be manufacturing-ready by the end of this year and production wafer start volumes in the first half of 2025.

“In July 2024, we released to foundry customers the 1.0 PDK for Intel 18A. Our first two Intel 18A products, Panther Lake for client and Clearwater Forest for servers, are on track to launch in 2025,” Gelsinger added.

Cost reduction strategies and efficiency goals

“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” Gelsinger said during Thursday’s earnings call. “Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating our IDM 2.0 transformation.”

“These actions,” Gelsinger added, “combined with the launch of Intel 18A next year to regain process technology leadership, will strengthen our position in the market, improve our profitability, and create shareholder value.”

During the earnings call, Intel’s Chief Financial Officer, David Zinsner, elaborated on the financial headwinds and the strategic steps being taken.

“Second-quarter results were impacted by gross margin headwinds from the accelerated ramp of our AI PC product, higher-than-typical charges related to non-core businesses, and the impact from unused capacity,” Zinsner said. “By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet.”

Zinsner expects these actions to “meaningfully improve liquidity and reduce our debt balance while enabling us to make the right investments to drive long-term value for shareholders.”

Intel’s cost-reduction plan is comprehensive. The company announced a series of initiatives to create a sustainable financial engine that accelerates profitable growth and enables further operational efficiency and agility.

These actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates.

“Lean operations will give Intel additional resources as well as timeshare to focus on AI than remain entangled in legacy products where with this kind of overhead costs they can only expect incremental growth,” Kawoosa said, adding “Intel needs a big bang to come back.”

By focusing on AI, Intel aims to not only regain its technological leadership but also to create a more resilient and profitable business model. As Intel takes these steps, the company is positioning itself to emerge stronger and more competitive in the AI era.

“Some non-core, less profitable businesses which could be a distraction, could also see divestments or spinoffs,” Shah added.

7 steps to a lean, clean Windows machine

August 2, 2024 /

These days, a relatively clean and uncomplicated Windows 10 or 11 system disk might be home to more than 250,000 files and 90,000 folders. A more complex, application-heavy system disk might contain between half a million and a million files. My Windows 10 production PC has over 2.9M files and 750K folders, for example. My brand-new Lenovo Yoga Slim 7x Copilot+ PC has over 250K files and 55K folders. That’s a lot of stuff!

Indeed, all those files need not necessarily hang around. That’s why it’s a good idea to practice regular disk hygiene. This is exactly what is explained and explored here, with plenty of examples and screen shots to illustrate the cleanup process. Best of all, the tools that help you tidy up won’t cost you a dime.

Step 1: Run built-in Windows disk cleanup tools

From time immemorial, Windows has included a utility for cleaning up disk space — namely, Disk Cleanup, also known as cleanmgr.exe. In Windows 10 and 11, users gained a second method to clean up disk space as part of the Settings-based “Storage Sense” facility aimed at optimizing storage.

There has been speculation that Disk Cleanup might disappear as Settings takes over Windows management and controls. Even so, the Disk Cleanup utility remains ready, willing, and able to work in in Windows 10 22H2 and Windows 11 24H2 as I write this story. Either the Settings or Disk Cleanup approach provides a great way to excise extraneous and unneeded Windows files (for Windows 10 and 11 versions across the board).

Option A: Run Disk Cleanup

  1. To launch Disk Cleanup, type disk clean or cleanmgr.exe into the Start menu search box.

2. The Disk Cleanup desktop app should appear at the top of those search results. If you can, select Run as administrator from the resulting options menu. Why? Only then does it offer to clean up redundant or outdated OS files (such as old OS files after an upgrade, or old updates) as well as other Windows leftovers.

3. Select the drive letter for the disk you wish to clean (for many readers this will start with the C: drive where Windows itself resides). Click the OK button to start Disk Cleanup on its merry way.

After Disk Cleanup scans your system’s C: drive, Figure 1 shows a reasonable facsimile of what you’ll see in Windows 11.

disk cleanup utility in windows 11

Figure 1: Disk Cleanup can sometimes clear out tremendous dreck: 33.5GB in this case.

Ed Tittel / IDG

When you run Disk Cleanup as Administrator, you can clear out previous Windows installations as well as other files. In the example shown here, the earlier Windows installation alone accounts for 25.4GB, with a total potential savings of 33.5GB. That’s a huge chunk of space.

4. Scroll through the checkbox items in the pane labeled “Files to delete” and pick stuff you’d like to lose. The numbers in the right column indicate how much disk space each item occupies. Don’t delete old OS versions or updates if you think you might want to roll back. Note also that the Downloads item represents the contents of your personal Downloads folder, so don’t delete it unless you’re sure you don’t need anything in there.

5. When you’ve made your selections for files to delete, click OK.

This process can — and often does — take several minutes to complete. While it’s running, it looks like what’s shown in Figure 2.

disk cleanup in progress

Figure 2: While it’s running, Disk Cleanup shows a progress bar and its current cleanup focus.

Ed Tittel / IDG

Option B: Clean up via Settings

Settings-based cleanup in Windows 10:

1. In Windows 10, navigate to Start > Settings > System > Storage > Configure Storage Sense or run it now > Free up space now.

2. On the “Free up space now” pane, click the Clean now button shown in Figure 3, lower left.

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Figure 3: Settings-based cleanup in Windows 10.

Ed Tittel / IDG

This cleans up storage in much the same way as if you’d run Disk Cleanup and clicked all available boxes — removing temporary files, update or upgrade files, delivery optimization files (designed for sharing on your local network but seldom used), obsolete device driver packages, and more. It will also empty the recycle bin. As with running Disk Cleanup, the “Free up space now” option in Settings often takes several minutes to run.

Settings-based cleanup in Windows 11:

Cleanup via Settings in Windows 11 works pretty much the same way, but looks quite different.

1. Navigate to Start > Settings > System > Storage Sense.

2. Scroll down and click the Run Storage Sense now button shown at the bottom of Figure 4.

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Figure 4: To start Settings-based cleanup in Windows 11, click the “Run Storage Sense now” button.

Ed Tittel / IDG

When you do this, a progress indicator shows you it’s working: balls cycle from left to right, then repeat until it’s finished.

On another Windows 11 test PC, it reported, “We were able to free up 2.4GB of disk space.” Easy-peasy.

Step 2: Run PC Manager as a Disk Cleaner alternative

More properly identified as Microsoft PC Manager, this interesting Microsoft Store utility includes a wide-ranging, capable, and surprisingly fast Deep cleanup option, right on home screen. It’s at the lower left in Figure 5.

microsoft pc manager main window

Figure 5: The Microsoft PC Manager offers a useful “Deep cleanup” facility.

Ed Tittel / IDG

1. To use it, simply click Deep cleanup, and a details screen appears with a list of potential cleanup targets, as shown in Figure 6.

pc manager deep cleanup list

Figure 6: PC Manager’s “Deep cleanup” details, with pre-selected checkboxes (partial view).

Ed Tittel / IDG

Much like the options in Disk Cleanup (but more detailed), it’s a checkbox list of all the things that PC Manager finds that you can elect to clean up or not. By default, this facility checks the usual suspects, as you can see in Figure 6, where Windows Update cleanup items, error reports, temp files, and so forth are already checked.

2. Check the box next to any additional items you want to delete, and uncheck any items you don’t want to delete.

3. When you’ve made your selections, click the Proceed button at upper right to commence scrubbing!

When this facility finishes its work, it reports, “Cleanup completed” and shows the total amount of disk space freed up. Good stuff!

For more information about Microsoft PC Manager (which can do a lot more than clean up files), see section 4 of my November 2023 CW story “How to manually update Windows Defender.”

Step 3: Run UnCleaner to catch what Microsoft  tools miss

Josh Cell is a Francophone developer in Canada who’s built a peachy and free utility called UnCleaner. It can ferret out and remove temporary and obsolete log files that Windows’ built-in utilities and PC Manager don’t catch and kill. You can download the latest version of UnCleaner (1.7) from Major Geeks. Don’t worry that this tool shows a 2012 date: I can attest it still works fine on Windows 10 and 11 systems in mid-2024.

Running on the same production PC upon which I just ran Disk Cleanup and PC Manager’s Deep cleanup, UnCleaner found nearly 70MB of files to clean up despite a notionally clean status, as shown in Figure 7.

uncleaner main screen

Figure 7: UnCleaner can find and clean files that other tools miss.

Ed Tittel / IDG

Simply click the Clean button (lower left) to excise those files. After I did so on my system, UnCleaner’s total for potential cleanup dropped to under 50MB.

You’ll never get this tool to delete everything it reports, because some of those files are locked by Windows runtime constraints. Sometimes — if rarely, in my experience — you’ll see a message that says, “Good. Your system is very clean.” ‘Nuff said!

Step 4: Use DriverStore Explorer to dismiss obsolete device drivers

DriverStore Explorer (RAPR.exe) is a free, open-source tool that you can download from GitHub. Always be sure to grab the most current release (0.11.92 as of this writing). Unless you’re a real Windows driver wizard, you need only click two buttons to make RAPR do its thing: Select Old Driver(s) and Delete Driver(s).

1. You must run RAPR in administrator mode (right-click its icon and select Run as administrator). When you start it up, it can take up to a minute to scan the contents of your PC’s driver store. Eventually, you’ll see a list of installed drivers with checkboxes.

2. Click the Select Old Driver(s) button at the top right of the screen, and the program will automatically check the boxes for the older driver versions it finds. They’re highlighted with blue checkmarks in Figure 8.

viewing old drivers with rapr.exe

Figure 8: Of the 102 duplicate or obsolete drivers on this PC, most come from Intel.

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viewing old drivers with rapr.exe

Figure 8: Of the 102 duplicate or obsolete drivers on this PC, most come from Intel.

Ed Tittel / IDG

viewing old drivers with rapr.exe

Figure 8: Of the 102 duplicate or obsolete drivers on this PC, most come from Intel.

Ed Tittel / IDG

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Ed Tittel / IDG

I used a test PC on which I regularly run the Intel DSA (Driver and Support Assistant): it’s notorious for downloading multiple copies of the same driver. Careful examination of the text at the bottom of the screencap shows that RAPR finds 102 duplicate or obsolete drivers on this PC. Zounds!

3. Click the Delete Driver(s) button, and RAPR will attempt to remove all highlighted items. Thankfully, RAPR won’t actually remove any drivers it finds in use, so this is a surprisingly safe operation.

Notice in Figure 8 that a raft of Intel Bluetooth drivers represents items targeted for deletion. That’s because the Intel Driver & Support Assistant keeps on installing Bluetooth drivers (monthly, if not more often). This makes for lots of duplicates. The selections shown recovered 1GB of disk space and reduced the count of old drivers from 102 to 9 (mostly related to printing and/or graphics: Windows can hang on to them stubbornly).

I’ve seen some RAPR runs recover multiple gigabytes, but space savings are seldom larger than that. First-time users may recover 3 to 5GB when cleaning up numerous driver files. (Graphics drivers often exceed 1GB in size; those add up quickly.)

Power users and experts can find a lot more for RAPR to do (see “How to reduce Windows driver bloat” for details), but most regular users will simply enjoy its ability to clean up old, outmoded drivers.

Step 5: Use DISM to clean the Component Store

Most Windows OS files reside in the WinSxS folder, also known as the Component Store. After you install a cumulative update, and sometimes after other updates, the Component Store may contain duplicate, obsolete, or orphaned elements. You can use the Deployment Image Servicing and Management (DISM) tool at the command line to check the Component Store from time to time. Such checks will tell you if a cleanup is needed.

1. To get started, you’ll need to open an elevated PowerShell or Command Prompt window.

  • On the Windows desktop, press the Windows key and X, then select Windows PowerShell (Admin) from the resulting pop-up menu.
  • Alternatively, you can type powershell into the Start menu search box, then right-click Windows PowerShell and select Run as administrator from that pop-up menu.

2. In the Administrator: Windows PowerShell window that appears, type this string and hit Enter: dism /online /cleanup-image /analyzecomponentstore

You’ll see something like what’s shown in Figure 9.

dism analyzecomponentstore command

Figure 9: DISM /analyzecomponentstore finds two packages for cleanup (reclamation).

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dism analyzecomponentstore command

Figure 9: DISM /analyzecomponentstore finds two packages for cleanup (reclamation).

Ed Tittel / IDG

dism analyzecomponentstore command

Figure 9: DISM /analyzecomponentstore finds two packages for cleanup (reclamation).

Ed Tittel / IDG

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Ed Tittel / IDG

As I wrote this story, I had just installed a Cumulative Update and other update items earlier that week. Sure enough, /analyzecomponentstore reported that there were two reclaimable packages ready for cleanup. Notice that the response text reported “Yes” in the field labeled “Component Store Cleanup Recommended.” That’s your clue that DISM has something it can clean up on your behalf.

3. To make that happen, in the Administrator: Windows PowerShell window, enter this string: dism /online /cleanup-image /startcomponentcleanup

The results appear in Figure 10, with an extra /analyzecomponentstore operation to show the results of the cleanup.

dism startcomponentcleanup and second analyzecomponentstore command

Figure 10: /startcomponentcleanup does its thing, and /analyzecomponentstore shows a reduced footprint and nothing left that’s reclaimable. Good!

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dism startcomponentcleanup and second analyzecomponentstore command

Figure 10: /startcomponentcleanup does its thing, and /analyzecomponentstore shows a reduced footprint and nothing left that’s reclaimable. Good!

Ed Tittel / IDG

dism startcomponentcleanup and second analyzecomponentstore command

Figure 10: /startcomponentcleanup does its thing, and /analyzecomponentstore shows a reduced footprint and nothing left that’s reclaimable. Good!

Ed Tittel / IDG

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Ed Tittel / IDG

Please note the dual progress lines (the first goes only to 10%, the next all the way to 100%) after the /startcomponentcleanup operation: this is a well-known foible of DISM in x86 Windows versions (both 10 and 11). As far as I can tell, it’s an output glitch. DISM works properly.

Now let’s compare the numbers from the first and second /analyzecomponentstore operations, to wit:

  • Size of component store: 13.66GB vs. 9.11GB (diff: 4.55GB)
  • Actual size of component store: 12.75GB vs. 8.80GB (diff: 3.95GB)
  • Shared with Windows: 6.81GB vs. 6.78GB (diff: 0.03GB)
  • Backups and disabled features: 5.81GB vs 2.02GB (diff: 3.79GB)

If you add the savings for “Shared with Windows” and “Backups and disabled features,” you get 3.82GB, which is nearly the savings in the actual size of the component store (3.95GB) — just as it should be. Recently updated systems may recover up to 4 or even 5GB using this technique. (Actual results depend on the number and size of reclaimable packages removed.)

For more incredibly useful things you can do with DISM, see “Why DISM is the Swiss Army knife of Windows maintenance.”

Step 6: Inspect the system drive with WizTree

Once all preceding cleanups are complete, it’s a good idea to inspect the system drive to see where the big files are. I use the free, donation-ware WizTree program, but TreeSize Free is a worthy alternative. Both programs produce treemap diagrams — graphical renderings of disk contents that make it easy to spot big files and folders.

To run a scan of the ever-popular C: drive, here are the steps to follow:

1. Launch the WizTree application.

2. Select the C: (or some other) drive as the scan focus from the pull-down list just below the File and Options menus at upper left (see Figure 11).

3. Click the Scan button to the right of the selected drive. This generates a treemap diagram for the selected drive fairly quickly — usually under a minute, even on ginormous drives. (I just pointed it at a 4TB Hitachi drive and it finished in under 10 seconds.)

Figure 11 shows the C: drive from my Lenovo Yoga Slim 7x Copilot+ PC.

wiztree treemap of disk contents

Figure 11: The WizTree drive contents treemap uses box size to show how file (and folder) sizes stack up.

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wiztree treemap of disk contents

Figure 11: The WizTree drive contents treemap uses box size to show how file (and folder) sizes stack up.

Ed Tittel / IDG

wiztree treemap of disk contents

Figure 11: The WizTree drive contents treemap uses box size to show how file (and folder) sizes stack up.

Ed Tittel / IDG

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Ed Tittel / IDG

In this situation, you’re looking for big files, because getting rid of them provides useful, quick wins in the disk space recovery game. Right here, I see that the largest files are the ones you’d expect to see­ — namely, the system hibernation file (hiberfile.sys) and the system page file (pagefile.sys), in yellow-green near center right.

After those behemoths (6.1 and 1.0GB, respectively), the next largest is named USMT.PPKG. A quick lookup reveals this is output from the User State Migration Tool (USMT), used to snapshot Windows app files and settings. According to the Windows community, this information is part of the Windows Recovery Environment (WinRE) and is thus eminently worth keeping around. Indeed, I don’t see any obvious candidates for clean-up in this recently rebuilt Windows installation.

But let’s pick the USMT.PPKG file as an example anyway. Here’s how you’d get rid of it (or stop short, as we will do):

1. Position the cursor over the file of interest: USMT.PPKG, in this case.

2. Right-click to produce a pop-up menu.

3. On the pop-up menu, click Delete (2nd item from bottom) to remove the selected file. We’ll skip that this time.

By clicking other “big blocks” in the treemap, you can quickly figure out where your biggest potential space recovery opportunities lie. You won’t be able to get rid of all of them — the paging and hibernation files must stay, for example — but if some of them can go, big space savings can result.

For me, that’s often Windows ISO files I no longer want or need. (They usually consume 4GB to 6GB of disk space, so each one tossed is a savings in its own right.)

Step 7: Uninstall unused or unwanted Windows apps

If you really want to clear out some clutter on your disk, consider removing apps you don’t use. Here’s how:

1. Click Settings > Apps > Installed apps (in Windows 11) or Settings > Apps > Apps & features (in Windows 10). You’ll find yourself faced with a list of everything that’s currently installed on the target PC.

2. Off to the right of each app, you’ll see an ellipsis. This is Windows iconography that tells you clicking will show more options. Click the three-dot icon next to any app, and you’ll see a pop-up menu that includes some or all of the following options:

  • Modify
  • Repair
  • Uninstall

3. Getting rid of an app you never use is easy: simply click the Uninstall button.

If you pick the stuff you never use — with certain exceptions, including Microsoft Edge, the Microsoft Store, and the Settings app itself — you can then follow other cleanup recommendations earlier in the story to recover the disk space they would otherwise consume.

The best guidance on this topic comes from Windows 10 Forums and Windows 11 Forum, where you’ll find tutorials that include “uninstall apps” in their titles. Highly recommended to help you pick things to scrap, if you’re of a mind to do so. I remove third-party apps I’m no longer using (as when I switched from WinDirStat to WizTree a few years back), but I prefer to leave Microsoft’s built-in apps alone. Do whatever suits you best.

Practice makes perfect

If you perform such cleanups periodically (I shoot for at least once a month), you’ll be able to keep your space consumption under much better control. Try this regimen out for yourself and you’ll soon see what I mean.

And don’t forget to slog through the Users folder (especially your account subfolder) from time to time, too, because junk too often tends to accumulate there. You can find that folder on your C: drive, where it sits alongside other, well-known top-level folders (e.g., Windows, Program Files, and so forth), as shown in Figure 12.

users folder in windows

Figure 12: The Users folder is at the top of the C: drive hierarchy, along with Windows, Program Files, and so forth.

Ed Tittel / IDG

After all the work is done, you can then blissfully enjoy your clean machine!

This article was originally published in January 2019 and most recently updated in August 2024.

Microsoft says 365 outage was amplified by internal errors

August 1, 2024 /

Microsoft’s latest outage on Tuesday might have been amplified by its own unforced errors, the company said in an incident report.

“While the initial trigger event was a distributed denial-of-service (DDoS) attack, which activated our DDoS protection mechanisms, initial investigations suggest that an error in the implementation of our defenses amplified the impact of the attack rather than mitigating it,” the report said.

The Microsoft 365 outage on Tuesday is the latest in a series of unforced errors by major IT vendors.

Failure to adequately test systems before roll-out was also a factor in the CrowdStrike incident on July 19, and behind DigiCert’s short-notice revocation of erroneously issued SSL certificates earlier this week.

The July 19 incident was caused by a flaw in CrowdStrike’s security sensor software that cost users millions of dollars in repairs and lost business opportunities, and that testing had failed to uncover.

A root cause analysis of the DigiCert incident showed that there were some process failures during the modernization of a software system that had also been missed during testing.

Steps Microsoft took to mitigate the outage

The latest problems with Microsoft 365 began to appear around 11:45 UTC on Tuesday, when an unexpected usage spike resulted in Azure Front Door (AFD) and Azure Content Delivery Network (CDN) components performing below acceptable thresholds, leading to intermittent errors, timeout, and latency spikes, Microsoft said. 

The dip in performance affected a subset of Microsoft 365 services and other services, including Azure App Services, Application Insights, Azure IoT Central, Azure Log Search Alerts, Azure Policy, as well as the Azure portal itself.

The services impacted included the Microsoft 365 admin center itself, Intune, Entra, and Power Platform.

In response to the outage, the company said that it had started investigations immediately and once it understood that a DDoS attack was behind the network spike, it had implemented networking configuration changes to support its DDoS protection efforts and performed failovers to alternate networking paths to provide relief.

“Our initial network configuration changes successfully mitigated majority of the impact by 14:10 UTC,” the company wrote in the report.

However, it pointed out that despite its early efforts several enterprise customers complained of less than 100% availability, which the company began mitigating at 18:00 UTC.

Without giving further details in the incident report, Microsoft said that it used a different approach to try and solve the issue starting with Asia Pacific and Europe.

“After validating that this revised approach successfully eliminated the side effect impacts of the initial mitigation, we rolled it out to regions in the Americas. Failure rates returned to pre-incident levels by 19:43 UTC,” the company wrote in the incident report, adding the incident was finally mitigated at 19:43 UTC.

Additional steps promised by Microsoft

In its initial report Microsoft said internal teams will be completing an investigation to understand the entire incident in more detail.

“We will publish a Preliminary Post Incident Review (PIR) within approximately 72 hours, to share more details on what happened and how we responded. After our internal retrospective is completed, generally within 14 days, we will publish a Final Post Incident Review with any additional details and learnings,” the company wrote in the report.

This is Microsoft’s 8th service status-related incident this year, according to the company’s service status page.

Last year was also riddled with outages for Microsoft 365 users. Azure’s service page shows that the last incident reported in 2023 was in September, when the US East region faced issues.

Reddit demands compensation from Microsoft for AI training

August 1, 2024 /

Reddit, which has signed cooperation agreements with Google and Open AI — giving both companies the right to train their AI models using the site’s content — is now demanding that Microsoft, Anthropic, and Perplexity do the right thing and sign similar agreements.

According to Reddit CEO Steve Huffman, the three companies have repeatedly used Reddit content to train their AI models, despite not being allowed to do so. Reddit has tried to block access via an updated version of the robots.txt file, but that hasn’t stopped the targeted companies from continuing to collect data.

A spokesperson from Anthropic said in a comment to The Verge that the collection of data from Reddit stopped in mid-May. Microsoft and Perplexity, however, did not immediately commented on Huffman’s claims.