Intel plans to cut 15,000 positions as it attempts a revival of its manufacturing operations that have fallen behind the development and artificial intelligence.
In New York, the shares of American chipmaker were down more than 20% in pre-market trade after it announced on Thursday night a drastic plan to reduce costs and warned that revenue for this quarter will be lower than expected. It announced that its dividend would be suspended.
Intel, a Californian company, plans to reduce its workforce by 15 percent. The majority of these job cuts will be completed before the end of the year. It wants to reduce its capital expenditure by more than $10 billion and cut operating costs.
Pat Gelsinger said that Intel’s CEO needed to reduce the number of employees at its headquarters and increase those in the field who support customers.
Investors are worried that Intel is falling behind in the race for AI chips. Shares of Intel have lost nearly 40% this year. The company has been hurt by a weaker demand for traditional data centre processors and increased competition on the personal computer market.
Intel’s revenue forecast for the first quarter was between $12.5 and $13.5 billion, which is below analysts’ average estimates of $14.35 Billion.
Gelsinger said, “Our goal is to return with the dividend. We want to pay a dividend that’s competitive over time. But right now we are focusing on our balance sheet and deleveraging.” Deleveraging and capital investment are, in our opinion, a better shareholder return than paying a current dividend.
Intel shares fell by $6.57 or 22.6% to $22.48 at pre-market trading on Wall Street.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.