Intel has announced a significant restructuring plan, including a 15% reduction in its workforce, approximately 15,000 jobs, and a 20% cut in capital spending for the year. The US chipmaker also revealed it will suspend its dividend to address its financial challenges.
These measures come as Intel faces difficulties in its turnaround strategy, with its shares falling over 20% in pre-market trading. CEO Pat Gelsinger cited production issues with the new Meteor Lake processors and a shift in customer spending towards AI chips from competitors like Nvidia as contributing factors. Intel’s data centre sales declined 3% in the latest quarter.
For Q2, Intel reported revenue of $12.8 billion, missing the $12.9 billion forecast, and earnings of 2 cents per share, down from 13 cents a year earlier. The company expects Q3 revenue between $12.5 billion and $13.5 billion, with a projected pro forma loss of 3 cents per share, contrary to Wall Street’s expectation of a profit.
Despite these setbacks, Intel remains committed to its long-term investment plans, supported by an $8.5 billion federal funding commitment, and aims to regain its leadership position in chipmaking by 2026.
