Intel Announces Major Layoffs and Misses Quarterly Guidance

Intel Announces Major Layoffs and Misses Quarterly Guidance

Intel has announced a significant workforce reduction, cutting 15% of its headcount as part of a $10 billion cost-reduction plan. This news comes alongside a disappointing quarterly earnings report, with the company missing analyst expectations. Intel’s shares dropped by 13% in extended trading following the announcement.

Key Financial Highlights:

• Earnings per Share: 2 cents adjusted (vs. 10 cents expected)
• Revenue: $12.83 billion (vs. $12.94 billion expected)

Performance Overview:

• Client Computing Group: $7.41 billion in revenue, up 9%
• Data Center and AI Unit: $3.05 billion in revenue, down 3%

Intel also announced that it would not pay its dividend in the fiscal fourth quarter of 2024. The company reported a net loss of $1.61 billion for the fiscal second quarter, a stark contrast to the $1.47 billion net income from the same period last year.

Strategic Moves:

• Apollo Investment: $11 billion in a joint venture for a chip manufacturing plant in Ireland
• New Product Launches: Xeon 6 server processors and Gaudi 3 AI accelerator

Future Outlook:

For the fiscal third quarter, Intel forecasts an adjusted net loss of 3 cents per share on revenue between $12.5 billion and $13.5 billion, below analyst expectations.

Intel’s stock has declined by 42% this year, while the S&P 500 index has risen by nearly 14%.