• Intel announces massive layoffs, cutting over 15% of its workforce and suspending dividends as part of a $10 billion cost-saving plan by 2025.
  • CEO Pat Gelsinger cites disappointing Q2 performance and challenging second-half trends, prompting decisive actions to improve efficiencies and accelerate IDM 2.0 transformation.

Intel announced on Thursday it would cut more than 15% of its workforce, some 17,500 people, and suspend its dividend starting in the fourth quarter as the chipmaker pursues a turnaround focused on its money-losing manufacturing business.

“We plan to deliver $10 billion in cost savings in 2025, and this includes reducing our headcount by roughly 15,000 roles, or 15% of our workforce. The majority of these actions will be completed by the end of this year,” said Intel CEO Pat Gelsinger said in a note to employees after second-quarter 2024 earnings were published.

Intel's Q2 financial performance was disappointing, despite achieving key product and process technology milestones. Gelsinger also stated that the second-half trends are more challenging than the company previously expected, and they are leveraging the new operating model to take decisive actions that will improve operating and capital efficiencies while accelerating Intel’s IDM 2.0 transformation.

Gelsinger further mentioned that next week, the company will introduce a companywide enhanced retirement offering for eligible employees and will broadly offer an application program for voluntary departures. 

Intel's layoff is the largest of any single job cut listed on Layoffs.fyi, an industry tracker that has been operating since March 2020. 

Also, reports suggest that Intel's lagging position in the market for artificial intelligence (AI) chips has contributed to its shares falling by more than 40% so far this year. 

For the third quarter, Intel expects revenue between $12.5 billion and $13.5 billion, compared to analysts' average estimate of $14.35 billion, according to LSEG data. The company also forecast an adjusted gross margin of 38%, significantly below market expectations of 45.7%.

Edited by Harshajit Sarmah