Intel to layoff roughly 15,000 workers amid revenue slump
A sign is posted in front of Intel headquarters on August 01, 2024 in Santa Clara, California. (Credit: Justin Sullivan/Getty Images)
Intel Corp. plans to cut 15% of its workforce as the company tries to turn its business around to compete with rivals such as Nvidia and AMD.
The CEO, Pat Gelsinger, sent a memo to staff on Thursday that said the company had plans to save about $10 billion in 2025.
"Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate," he wrote in the memo published to Intel’s website. "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."
Next week, Gelsinger wrote, Intel will announce an "enhanced retirement offering" for eligible employees and offer an application program for voluntary departures. Intel had 124,800 employees as of the end of 2023 according to a regulatory filing.
"These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career," he said. The bulk of the layoffs are expected to be completed this year.
Intel stocks plummet
The roughly 15,000 job cuts come on the heels of a disappointing quarter and forecast for the iconic chip maker founded in 1968 at the start of the PC revolution.
The company also announced plans to suspend its stock dividend as part of a broader plan to cut costs.
Intel reported a loss for its second quarter along with a small revenue decline, and it forecast third-quarter revenues below Wall Street's expectations.
The company posted a loss of $1.6 billion, or 38 cents per share, in the April-June period. That's down from a profit of $1.5 billion, or 35 cents per share, a year earlier. Adjusted earnings excluding special items were 2 cents per share.
Shares plunged more than 20% to $23.82 in after-hours trading, indicating that Intel could lose roughly $24 billion of its market value when the stock market opens Friday.
The Associated Press contributed to this report. This story was reported from Los Angeles.