Intel share price plunged 20% in extended trade, losing more than $24 billion in market value, after the chipmaker announced job cuts and suspension of its dividend. Intel stock had closed down 7% on Thursday.
Intel said it would cut more than 15% of its workforce, around 17,500 people, and suspend its dividend starting in the fourth quarter amid plans of a turnaround focused on its money-losing manufacturing business, Reuters reported.
The Santa Clara, California-based company employed 116,500 people as of June 29. It said the majority of the job cuts would be completed by the end of 2024.
The company said it would cut operating expenses and reduce capital expenditure by more than $10 billion in 2025, more than it initially planned, the Reuters report said.
Intel is also slashing its investments. The company expects to cut capital expenses by 17% in 2025 year-on-year (YoY) to $21.5 billion, calculated on the midpoint of a range the chipmaker forecast, Reuters reported. It expects these costs to stay roughly flat in 2024.
It also forecast third-quarter revenue below market estimates. For the third quarter, Intel expects revenue of $12.5 billion to $13.5 billion, compared with analysts’ average estimate of $14.35 billion, LSEG data showed. It forecast adjusted gross margin of 38%, well short of market expectations of 45.7%.
As of June 29, the company had cash and cash equivalents of $11.29 billion, and total current liabilities of about $32 billion.
Intel shares have fallen more than 40% so far this year.
(With inputs from Reuters)
