In a surprising turn of events, tech giant Intel is set to cut over 15% of its global workforce, amounting to around 17,500 jobs. This hefty reduction is part of a daring plan to turn the company around by refocusing on its struggling manufacturing business.
The move comes alongside the suspension of dividends starting in the fourth quarter. Intel's CEO, Pat Gelsinger, voiced the company's new direction, stating, \"I need fewer people at headquarters, more people in the field supporting customers.\"
This shake-up is Intel's response to shifting market demands, especially as competitors like Nvidia and AMD surge ahead in the booming AI chip sector. Intel has been grappling with decreased spending on traditional data center semiconductors while lagging behind in AI chip development.
Investors reacted swiftly, with Intel's shares plummeting 20% in after-hours trading—ouch! 😬 That’s a potential loss of over $24 billion in market value.
The company, which had about 116,500 employees as of June 29, plans to complete most of these job cuts by the end of 2024. Earlier this year, Intel declared a quarterly dividend of 12.5 cents per share, but the suspension indicates a shift in priorities.
Intel's grand plan involves doubling down on advanced AI processors and expanding its for-hire manufacturing capabilities. They aim to regain the technological edge they lost to rivals like Taiwan's TSMC, the world's largest contract chipmaker.
However, this ambitious push has increased costs and squeezed profit margins, prompting the need for cost-cutting measures. The tech world will be watching closely to see if Intel's bold moves will pay off. Stay tuned! 🚀
Reference(s):
cgtn.com
