Intel has confirmed that it will lay off workers soon as part of its plan to cut billions of dollars in spending. The announcement comes after reports that Intel is planning on cutting thousands of jobs.

As part of its Q3 earnings, the company announced plans to cut around $3 billion in costs over the course of next year, and CEO Pat Gelsinger told Reuters that part of that would come from “people costs.” He also confirmed the job cuts to Bloomberg and added that the company was reducing factory work hours for some employees. By the end of 2025, the company hopes to have cut its costs by $8 to $10 billion a year.

Intel is faced with an industry-wide shift in semiconductor availability as the pandemic shortages give way to overproduction in certain segments — a problem also affecting competitors AMD and Nvidia. “The chip industry is changing from that of shortage to surplus (by early 2023) across a number of devices. This will negatively impact revenues across the chip industry (at least in most cases), and typically, these situations call for re-evaluation of cost and margins,” said Gartner analyst Gaurav Gupta in an email to The Verge.

In his Reuters interview, Gelsinger did say that Intel’s people costs were a relatively small part of its overall spending, so the company is more focused on its factories and fabs as places to save money. The company is currently in the process of building a facility in Ohio, which it broke ground on earlier this year, and has committed at least $20 billion to the project.

Additional reporting by Umar Shakir