Intel cuts 15,000 jobs in push to catch up on AI chips

Intel is planning to cut 15,000 jobs as it attempts to revive its manufacturing operations, which have fallen behind in the development of artificial intelligence.
The American chipmaker’s shares were down by more than 20 per cent in pre-market trading in New York after it announced a drastic cost reduction plan on Thursday night and warned that its revenue for the current quarter would be lower than expected. It also said that it would suspend its dividend.
The California-based Intel plans to cut 15 per cent of its workforce, with the majority of the job losses to be completed by the end of this year. It wants to cut its operating expenses and to reduce capital expenditure of more than $10 billion in 2025.
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“I need less people at headquarters, more people in the field, supporting customers,” Pat Gelsinger, Intel’s chief executive, said.
Shares in Intel have already lost almost 40 per cent of their value this year amid investors’ concerns that it has fallen behind in the AI chip race. The company has suffered from weaker demand for its traditional data centre chips and increased competition in the personal computer market.
Intel said it expected to bring in revenue of between $12.5 billion and $13.5 billion for the quarter, short of analysts’ previous average estimate of $14.35 billion.
“Our objective is to come back with the dividend, to pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging,” Gelsinger, 63, said. “Deleveraging and capital investments are, we believe, a greater shareholder return right now than paying a dividend.”
Intel’s shares were down by $6.57, or 22.6 per cent, at $22.48 in pre-market dealing on Wall Street.