Intel to Lay Off 15,000 Workers

Chipmaker Intel Corp. has announced a significant restructuring plan that includes cutting 15% of its workforce as it seeks to regain competitiveness against rivals such as Nvidia and AMD. The Santa Clara, California-based company revealed on Thursday that it will also suspend its stock dividend as part of a broader cost-cutting strategy. The layoffs are expected to be largely completed within this year, reflecting the company's urgent need to address its financial challenges. In its recent financial report, Intel disclosed a loss of $1.6 billion, or 38 cents per share, for the second quarter, a stark contrast to a profit of $1.5 billion, or 35 cents per share, during the same period last year. Revenue experienced a slight decline of 1%, falling to $12.8 billion from $12.9 billion. Analysts had anticipated earnings of 10 cents per share on revenue of $12.9 billion, indicating that Intel's performance fell short of market expectations. The company is also navigating a complex landscape shaped by recent government support. In March, the Biden administration reached an agreement with Intel under the CHIPS and Science Act, providing up to $8.5 billion in direct funding and $11 billion in loans for chip manufacturing plants across several states. Intel had projected that this funding would create approximately 30,000 jobs in manufacturing and construction. Analysts, however, caution that while the cost-cutting measures may improve Intel's short-term financial outlook, they are not sufficient to redefine the company's position in the rapidly evolving chip market. eMarketer analyst Jacob Bourne emphasized that Intel is at a critical juncture, needing to leverage U.S. investments and the growing demand for AI chips to secure its future in chip fabrication.