The Santa Clara-based company will also suspend dividend payments.
It has high hopes for its Intel 18A node, with products expected to hit the market in 2025.
Intel is currently facing challenging times. The tech giant, with approximately 110,000 employees, has recently announced plans to lay off 15% of its workforce. In addition, it’ll suspend dividend payments to shareholders starting in the fourth quarter as part of a drastic plan to reduce spending.
The company is set to gradually implement job cuts that will affect more than 10,000 workers between now and the end of 2024. On Thursday, Intel acknowledged its poor financial situation and projected savings of about $20 billion this year and an additional $17.5 billion next year.
Massive Job Cuts at Intel
The recent announcements follow Intel's presentation of financial results for the second quarter of 2024, which revealed room for improvement. Intel, a long-standing market leader in processors, is facing strong competition with a promising future.
According to the report, sales showed a 1% decrease from the same period last year ($12.9 billion), totaling $12.8 billion. The company also reported a net loss of $1.61 billion, compared to earnings of $1.481 billion in the second quarter of 2024.
“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones.”
Intel CEO Pat Gelsinger acknowledges the company’s current challenges but emphasizes its commitment to recovery. He also noted that the second quarter presented more difficulties than anticipated, leading to significant cuts and adjustments, with hopes pinned on Intel 18A, Intel’s new CPU process technology expected to debut on the Panther Lake and Clearwater Forest chips in 2025.
The reduction in staff and budget will impact areas such as research and development, marketing, and administration. Furthermore, the suspension of dividend payments is expected to be lifted “as cash flows improve.”
As mentioned earlier, Intel 18A is Intel’s strategy to regain its leadership in the semiconductor industry. We expect the company to have its 18A node ready by the end of this year. This development is expected to bolster the company’s position for 2025, when the first 18A products are expected to hit the market.
This article was written by Javier Marquez and originally published in Spanish on Xataka.
Image | Intel
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