Intel Announces Major Job Cuts and Cost-Cutting Measures
Intel, the American semiconductor giant, is facing significant challenges in the competitive AI chip market and has announced a major restructuring plan. This plan includes eliminating 15,000 jobs, which represents 15% of its total workforce. The company also plans to suspend dividend payments and implement other cost-cutting measures to reduce operating expenses and capital expenditure by more than $10 billion by 2025.
The job cuts are expected to be largely completed by the end of 2024 and are part of a broader effort to revitalize Intel's lagging manufacturing operations and catch up in the AI chip market. The company's shares have plummeted by 20% in after-hours trading following the announcement, reflecting investor concerns about Intel's position in the AI chip race.
Intel's CEO, Pat Gelsinger, stated that the company needs to shift its focus from headquarters to the field, supporting customers. He also commented on the dividend suspension, saying that the company's current priority is to deleverage and invest in capital, which offers greater shareholder returns at this time.
For the upcoming quarter, Intel anticipates revenue between $12.5 billion and $13.5 billion, significantly below analysts' average estimate of $14.35 billion. This further highlights the challenges Intel is facing in the current market.