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Aug 1 - Intel said on Thursday it would cut 15% of its workforce and will suspend its dividend in the fourth quarter as the chipmaker pursues a turnaround centered around its loss-making manufacturing business.
Shares of the Santa Clara, California-based company fell 10% in extended trading. The stock closed down 7% on Thursday, in tandem with U.S. chip stocks plummeting after a conservative forecast from Arm Holdings on Wednesday.
A majority of the job cuts will be completed by the end of 2024, Intel said.
The company also set out plans to cut operating expenses and reduce capital expenditure of more than $10 billion in 2025 compared to previous estimates.
In February last year, the company had set out to provide annual cost savings between $8 billion and $10 billion by 2025.
Intel also forecast third-quarter revenue below estimates as the chipmaker grapples with a pullback in spending on traditional data center chips and increased competition in the personal computer market.
A key force in the PC revolution, Intel is now trailing Nvidia in the booming artificial intelligence processor market while its data center business is facing threat from a resurgent AMD.
Stumbles in Intel's manufacturing process have allowed AMD to take business, as the latter uses Taiwan Semiconductor Manufacturing Co (TSMC).
Intel expects revenue to be between $12.5 billion and $13.5 billion for the quarter, compared with analysts' average estimate of $14.35 billion, according to LSEG data.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sriraj Kalluvila)
