Chipmaker Intel Corp. has announced plans to reduce its workforce by 15% as part of a restructuring strategy aimed at enhancing its competitiveness against industry rivals like Nvidia and AMD. The California-based company also disclosed the suspension of its stock dividend as a component of its broader cost-cutting measures. The majority of the layoffs are expected to be finalized within this year.
In its recent financial report, Intel revealed a second-quarter loss and a slight decrease in revenue. The company reported a loss of $1.6 billion, or 38 cents per share, for the April-June period, a downturn from the $1.5 billion profit, or 35 cents per share, recorded a year earlier. Adjusted earnings, excluding special items, were 2 cents per share. Revenue dipped by 1% to $12.8 billion from the previous $12.9 billion.
Analysts had anticipated earnings of 10 cents per share on revenue of $12.9 billion, as per a survey by FactSet. Notably, eMarketer analyst Jacob Bourne remarked that while Intel’s cost-cutting plan, which includes layoffs, may improve its short-term financial outlook, it may not be adequate to reposition the company within the evolving chip market landscape. Bourne noted the importance for Intel to leverage U.S. investments in domestic manufacturing and the growing global demand for AI chips as it navigates the competitive chip fabrication sector.
According to a regulatory filing, Intel had a workforce of 124,800 employees by the end of 2023. CEO Pat Gelsinger, in a memo to Intel staff, informed them about the plan to reduce headcount by approximately 15,000 employees.
Intel is set to reduce workforce by over 15% in cost-cutting effort to revamp operations
