Chipmaker Intel Corp. is laying off 15% of its massive workforce in an effort to get its business back on track so it can compete with more successful rivals such as Nvidia and AMD.
The Santa Clara, California-based company said Thursday it is also suspending its stock dividend as part of a broader plan to cut costs. Most of the layoffs will be completed this year.
Intel reported a second-quarter loss and a slight decline in revenue. The company said third-quarter revenue would be below Wall Street expectations.
The company posted a loss of $1.6 billion, or 38 cents a share, in the April-June period. That was smaller than the profit of $1.5 billion, or 35 cents a share, a year earlier. Adjusted earnings excluding special items were 2 cents a share.
Revenue fell 1% from $12.9 billion to $12.8 billion.
Analysts on average expected earnings of 10 cents per share on revenue of $12.9 billion, according to a FactSet poll.
“Intel’s announcement of a significant cost-cutting plan, including layoffs, could bolster its near-term financial results, but the move alone isn’t enough to redefine its position in the evolving chip market,” said eMarketer analyst Jacob Bourne. “The company faces a critical juncture as it leverages U.S. investment in domestic manufacturing and rising global demand for AI chips to establish itself in chip manufacturing.”
According to a regulatory filing, Intel had 124,800 employees at the end of 2023. That would put the number of jobs the company plans to cut at more than 18,500.
