Intel announced major layoffs on Thursday, cutting 15,000 jobs after a $1.6 billion loss, despite receiving a large amount of funding from the Biden administration.
Intel is cutting 15 percent of its workforce, or about 15,000 jobs, as it restructures its business and seeks to better compete with industry leaders such as Nvidia and AMD. announcement The Santa Clara, California-based tech giant has been hit by a series of financial woes, and Chief Executive Officer Pat Gelsinger said in a memo to employees that the cuts are part of a broader effort to save $10 billion by 2025.
Intel cuts 15,000 jobs, posts $1.6 billion loss just months after Biden funding https://t.co/mJUduulHPg pic.twitter.com/U99gpztRsf
— New York Post (@nypost) August 1, 2024
Gelsinger said the company needed to align its cost structure to a new business model amid missed revenue guidance and insufficient profits from fast-growing areas such as artificial intelligence. (Related: John Deere announces plans to relocate production overseas and cut jobs)
“These decisions drive me deep into my heart and have been the most difficult of my career. I am committed to prioritizing a culture of integrity, transparency and respect in the coming weeks and months,” Gelsinger said in a statement.
A view of Intel's wafer fabrication plant in Dalian, northeast China's Liaoning province, June 26, 2024. (Photo by Pedro Pardo/AFP via Getty Images)
In addition to cost-cutting measures, Intel is also suspending its stock dividend. The announcement comes after the company reported second-quarter financial results in which it suffered a $1.6 billion loss and a slight decline in revenue to $12.8 billion, below market expectations, the New York Post reported. reportDespite these setbacks, Intel has benefited from significant legislative support in the United States, particularly through the CHIPS and Science Act of 2022.
The legislation allows Intel to access up to $19.5 billion in funding and loans to expand its domestic manufacturing capacity, and President Joe Biden praised the move as crucial to revitalizing America's technological leadership and economic resilience, the media reported.
According to the New York Post, Intel shares reacted negatively to the news, plummeting more than 20% in after-hours trading.
