Intel to Lay Off Over 15% of Workforce Amid Meteor Lake Yield Issues and Dividend Suspension

In a significant move to restructure its operations, Intel has announced plans to lay off more than 15% of its workforce, translating to approximately 15,000 employees or more. This decision comes as the company grapples with yield issues related to its Meteor Lake processors and a challenging financial outlook.

Meteor Lake Yield Issues Impacting Financial Performance

Intel’s Meteor Lake processors have encountered yield issues, which have significantly impacted the company’s bottom line. The yield problems have led to increased production costs and delays, further straining Intel’s financial performance. The company reported a loss of $1.6 billion in the recent quarter, highlighting the severity of the situation.

Suspension of Dividend

In addition to the layoffs, Intel has announced the suspension of its dividend starting in the fourth quarter of 2024. This move is part of a broader strategy to reduce spending by $10 billion by 2025. The suspension of the dividend, which has long been considered a staple for Intel’s investors, underscores the company’s urgent need to stabilize its financial health.

Broader Restructuring Efforts

The layoffs and dividend suspension are part of a comprehensive restructuring plan aimed at turning Intel’s business around. CEO Pat Gelsinger has outlined a series of cost-cutting measures, including offering buyouts and early retirement options to employees. The company will also cancel some underperforming products and reduce spending in marketing and R&D.

Future Outlook

Despite the current challenges, Intel remains committed to its long-term goals. The company has assured that its next-generation processors, including the Panther Lake and Clearwater Forest, are still on track. Additionally, Intel’s 18A process node, crucial for its custom foundry business, continues to progress as planned.

Conclusion

Intel’s decision to lay off a significant portion of its workforce and suspend its dividend marks one of the most substantial restructuring efforts in the company’s history. As Intel navigates these turbulent times, the focus remains on stabilizing its financial performance and ensuring the successful development of its future technologies.