Intel is planning to cut around 17,500 jobs, which is more than 15% of its workforce. They will also stop paying dividends starting from the fourth quarter. This is part of Intel's effort to improve its struggling manufacturing business.
Intel expects to make less money than analysts had predicted in the third quarter. Their revenue forecast is lower, and they are facing challenges in their traditional chip business and catching up in the AI chip market.
As a result, Intel's stock price fell sharply, losing 20% of its value. Other chip companies like Nvidia and AMD saw their stock prices go up, highlighting their advantage in the AI market.
Intel's CEO, Pat Gelsinger, said the company needs fewer employees at its headquarters and more in the field to support customers. He also mentioned that the suspension of dividends is to help the company focus on its financial health.
Intel is working on a plan to cut costs and improve its technology, especially in AI chips, to regain its competitive edge. They aim to reduce operating expenses and investments by over $10 billion by 2025. However, there are questions about whether these steps are enough and if they are coming too late.
Intel's stock has dropped over 40% this year, partly because they are not doing as well in the AI chip market. They expect their third-quarter revenue to be between $12.5 billion and $13.5 billion, which is below what analysts had forecasted.
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