Intel will cut 15% of its workforce, about 15,000 workers

Intel said it plans to cut more than 15% of its workforce, about 15,000 people, as part of a $10 billion cost-cutting plan, prompting a 20% drop in the company's stock price. The company will also not pay a dividend in the fourth quarter of fiscal 2024 and will reduce full-year capital expenditures by more than 20%.

In the fiscal second quarter ended June 29, Intel's revenue fell 1% year over year. The company posted a loss of $1.61 billion (or 38 cents per share) after making a profit of $1.48 billion in the same period last year.

CEO Pat Gelsinger said the losses were due to a decision to accelerate production of Core Ultra PC chips, which can be used in artificial intelligence tasks. He also noted that Intel has decided to accelerate the move of Intel 4 and 3 chip production from the Oregon factory to the Irish factory, which will lead to higher costs in the short term, but also higher gross profit in the future.

For the fiscal third quarter, Intel forecasts an adjusted loss of 3 cents per share on revenue of $12.5 billion to $13.5 billion. LSEG analysts expect a loss of 31 cents per share on revenue of 14.35 billion.

The job cuts, which will affect about 15,000 employees, will mostly take place this year. This is the most extensive layoff of all the job cuts listed on Layoffs.fyi since March 2020.