Current:Home > ContactIntel to lay off more than 15% of its workforce as it cuts costs to try to turn its business around -Wealth Evolution Experts
Intel to lay off more than 15% of its workforce as it cuts costs to try to turn its business around
View
Date:2025-04-16 10:14:03
Chipmaker Intel Corp. is cutting 15% of its massive workforce — about 15,000 jobs — as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD.
In a memo to staff, Intel CEO Pat Gelsinger said Thursday the company plans to save $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.”
The job cuts come in the heels of a disappointing quarter and forecast for the iconic chip maker founded in 1968 at the start of the PC revolution.
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.
The Santa Clara, California-based company is also suspending 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.
Revenue slid 1% to $12.8 billion from $12.9 billion.
Analysts, on average, were expecting earnings of 10 cents per share on revenue of $12.9 billion, according to a poll by FactSet.
“Intel’s announcement of a significant cost-cutting plan including layoffs may bolster its near-term financials, but this move alone is insufficient 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 the surging global demand for AI chips to establish itself in chip fabrication.”
In March, President Joe Biden celebrated an agreement to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants around the country, talking up the investment in the political battleground state of Arizona and calling it a way of “bringing the future back to America.”
In September 2022, Biden praised Intel as a job creator with its plans to open a new plant near Columbus, Ohio. The president praised them for plans to “build a workforce of the future” for the $20 billion project, which he said would generate 7,000 construction jobs and 3,000 full-time jobs set to pay an average of $135,000 a year.
Shares plunged 18% to $23.82 in after-hours trading
—
Associated Press Writer Josh Boak contributed from Washington.
veryGood! (886)
Related
- Person accused of accosting Rep. Nancy Mace at Capitol pleads not guilty to assault charge
- What's Making Us Happy: A guide to your weekend viewing and listening
- It's back-to-school shopping time, and everyone wants a bargain
- Biden Administration Quietly Approves Huge Oil Export Project Despite Climate Rhetoric
- Buckingham Palace staff under investigation for 'bar brawl'
- Pikmin 4 review: tiny tactics, a rescue dog and a fresh face
- Climate Change and Habitat Loss is Driving Some Primates Down From the Trees and Toward an Uncertain Future
- The black market endangered this frog. Can the free market save it?
- Global Warming Set the Stage for Los Angeles Fires
- A New Report Suggests 6 ‘Magic’ Measures to Curb Emissions of Super-Polluting Refrigerants
Ranking
- Charges tied to China weigh on GM in Q4, but profit and revenue top expectations
- Hotel workers' strike disrupts July 4th holiday in Southern California
- Dolly Parton Makes Surprise Appearance on Claim to Fame After Her Niece Is Eliminated
- Climate Change Makes Things Harder for Unhoused Veterans
- Justice Department, Louisville reach deal after probe prompted by Breonna Taylor killing
- Fox News hit with another defamation lawsuit — this one over Jan. 6 allegations
- Why Keke Palmer Is Telling New Moms to “Do You” After Boyfriend Darius Jackson’s Online Drama
- KitchenAid Mixer Flash Deal: Take $180 off During the Amazon Prime Day 2023 Sale
Recommendation
A South Texas lawmaker’s 15
FTC investigating ChatGPT over potential consumer harm
Save Up to $250 on Dyson Hair Tools, Vacuums, and Air Purifiers During Amazon Prime Day 2023
Britney Spears’ Upcoming Memoir Has a Release Date—And Its Sooner Than You Might Think
Federal hiring is about to get the Trump treatment
Britney Spears’ Upcoming Memoir Has a Release Date—And Its Sooner Than You Might Think
10 million sign up for Meta's Twitter rival app, Threads
Inside Clean Energy: ‘Solar Coaster’ Survivors Rejoice at Senate Bill