Intel plans to cut 15,000 jobs, or about 15% of its workforce, CEO Pat Gelsinger said in a memo to employees on Thursday.
The layoffs come as part of an effort to achieve $10 billion in cost savings by 2025 after the chipmaker reported “disappointing” second-quarter results.
“This is tough news for me,” Gelsinger said, “and I know it’s even tougher for you. This is an incredibly tough day for Intel because we’re undergoing some of the most significant changes in the history of our company.”
“Simply put, we must align our cost structure to a new operating model and fundamentally change how we operate,” he continued. “Our revenues are not growing as we hoped, and we have yet to fully benefit from powerful trends like AI.”
Intel reported second-quarter 2024 revenue of $12.8 billion, down 1% year over year and below the company’s expectations, and a net loss of $1.6 billion, or 38 cents per share.
“Our costs are too high and our margins are too low,” Gelsinger added in the memo to employees. “Actions on both require bolder action, especially given our financial performance and outlook for the second half of 2024 are more challenging than previously expected.”
In addition to cutting jobs, the company plans to simplify its portfolio to focus on “fewer, more impactful products,” cut capital spending and suspend its stock dividend to “prioritize investments in the business and drive more sustainable profitability,” the CEO said.
