Intel Corporation, once the dominant player in the chip industry, announced a drastic restructuring plan on August 1, 2024, in response to disappointing financial results and increasing competition. The plan includes cutting more than 15% of its workforce, approximately 18,500 employees, and suspending dividend payments starting from the fourth quarter of 2024.The company reported a net loss of $1.6 billion in the second quarter of 2024, compared to a profit of $1.48 billion in the same period last year. Revenue declined 1% year-over-year to $12.8 billion, falling short of analyst expectations. In response to these challenges, Intel aims to reduce costs by $10 billion by 2025 through various measures, including workforce reduction and lowering capital expenditures by over 20%.CEO Pat Gelsinger described the quarterly results as ‘disappointing’ and warned that the second half of 2024 would be even more challenging than previously expected. ‘Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,’ Gelsinger stated in a memo to staff.The restructuring plan also involves a shift in Intel’s business model, with the company planning to manufacture processors for competitors and invest heavily in emerging technologies like artificial intelligence. However, analyst Jacob Bourne cautioned that while the cost-cutting measures may improve near-term financials, they alone are insufficient to redefine Intel’s position in the evolving chip market.Intel’s stock price fell by up to 20% in extended trading following the announcement, resulting in a loss of over $24 billion in market value. The company expects to complete most of the job cuts by the end of 2024 and plans to offer improved retirement packages and a voluntary exit program for eligible employees.Despite the challenges, some industry observers remain optimistic about Intel’s future. Scott Constable, alliance director at Vesper Technologies, noted, ‘Every cloud has its silver lining,’ suggesting potential opportunities amid the restructuring. Intel aims to complete its Intel 18A plan to recover leadership in the semiconductor industry by the end of 2024, potentially improving its market position for 2025.
Key points
- Intel plans to cut over 15% of its workforce (about 18,500 jobs) and suspend dividends as part of a major restructuring plan.
- The company reported a $1.
- CEO Pat Gelsinger warned of a more challenging second half of 2024 and announced plans to save $10 billion by 2025 through cost-cutting measures.
- Intel’s stock fell by up to 20% following the announcement, resulting in a $24 billion loss in market value.
6 billion loss in Q2 2024, with revenue declining 1% to $12.
8 billion.
Contradictions👾Some sources report the number of layoffs as 15,000, while others state it could be as high as 18,500 or even 19,000.
The exact number seems to vary based on the total employee count used in calculations.
