Intel, the well-known chip maker based in Silicon Valley, has announced plans to cut over 15,000 jobs as part of a turnaround effort. The company has been facing challenges and setbacks recently, including a net loss and declining revenue in the latest quarter.
The job cuts represent about 15 percent of Intel’s workforce. In addition to the layoffs, the company is implementing other restructuring measures and reducing capital spending, with the goal of cutting costs by $10 billion by 2025. To preserve cash, Intel will suspend its quarterly dividend in the fourth quarter.
In a letter to employees, Intel’s chief executive, Patrick Gelsinger, expressed the difficulty of the decision, acknowledging the impact it will have on the staff. He described the changes as some of the most significant in the company’s history, emphasizing the challenging nature of the situation.
Following the announcement, Intel’s stock experienced a significant drop of more than 20 percent in after-hours trading. The company, known for producing microprocessor chips used in computers, has been facing increased competition in the artificial intelligence chip market, contributing to its recent struggles.
This is not the first time Intel has undergone a major restructuring. In 2016, the company announced plans to cut up to 12,000 jobs, representing 11 percent of its workforce at the time. Since taking on the role of chief executive in early 2021, Mr. Gelsinger has been working to revitalize the company.
One of his key initiatives has been advocating for federal subsidies to promote more U.S. production of essential components. Additionally, Mr. Gelsinger has been addressing Intel’s manufacturing challenges, as the company both designs and produces its chips, unlike many of its competitors who rely on external foundries for production.
The decision to cut jobs and implement cost-saving measures reflects Intel’s efforts to navigate a challenging market landscape and position itself for future growth. The company’s leadership is focused on making strategic changes to ensure long-term success and competitiveness in the industry.