Intel announced massive layoffs Thursday, cutting 15,000 jobs following a $1.6 billion loss, despite receiving substantial funding from the Biden administration.
Intel Corp. is slashing 15% of its workforce, totaling approximately 15,000 jobs, in a drastic move to reshape its operations and sharpen competitiveness against industry leaders such as Nvidia and AMD. This announcement follows a series of financial setbacks for the Santa Clara, California-based tech giant. In a memo to employees, CEO Pat Gelsinger revealed the cuts as part of a broader initiative to save $10 billion by 2025.
Intel cuts whopping 15K jobs, posts $1.6B loss just months after getting Biden funds https://t.co/mJUduulHPg pic.twitter.com/U99gpztRsf
— New York Post (@nypost) August 1, 2024
Gelsinger expressed the necessity of aligning the company’s cost structure with its new business model amid unmet revenue expectations and insufficient gains from burgeoning sectors like artificial intelligence. (RELATED: John Deere Announces Layoffs While Moving Production Abroad)
“These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career. My pledge to you is that we will prioritize a culture of honesty, transparency and respect in the weeks and months to come,” Gelsinger said in a statement.
View of Intel Corporation’s wafer manufacturing plant in Dalian, in China’s northeastern Liaoning province on June 26, 2024 (Photo by PEDRO PARDO/AFP via Getty Images)
Adding to its cost-cutting measures, Intel will also suspend its stock dividend. This follows a financial report for the second quarter, where Intel faced a loss of $1.6 billion and a minor revenue drop to $12.8 billion, trailing behind market forecasts, New York Post reported. Despite these setbacks, Intel has benefited from significant legislative support in the U.S., notably through the CHIPS and Science Act of 2022.
This act facilitated up to $19.5 billion in funding and loans for expanding Intel’s domestic manufacturing capabilities, a move praised by President Joe Biden as critical to revitalizing American technological leadership and economic resilience, the outlet stated.
Intel’s stock responded negatively to the news, plunging over 20% in after-hours trading, according to the New York Post.