Chipmaker Intel to cut 15,000 jobs

Chipmaker Intel says it is cutting 15% of its workforce — about 15,000 jobs — as it tries to turn its business around to compete with more successful rivals like Nvidia and AMD.

In a memo to staff, Intel Corp chief executive Pat Gelsinger said the company plans to save 10 billion dollars in 2025.

“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” he wrote in the memo published on Intel’s website. “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low.”

The job cuts come on the heels of a disappointing quarter and forecast for the iconic chip maker founded in 1968 at the start of the PC revolution.

Next week, Mr Gelsinger wrote, Intel will announce an “enhanced retirement offering” for eligible employees and offer an application program for voluntary departures.

“These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career,” he said. The bulk of the layoffs are expected to be completed this year.

The Santa Clara, California-based company is also suspending its stock dividend as part of a broader plan to cut costs.

Intel reported a loss for its second quarter along with a small revenue decline, and it forecast third-quarter revenues below Wall Street’s expectations.

Its stock plunged 19% in after-hours trading, indicating that Intel could lose roughly 24 billion dollars (£18.8 billion) of its market value when the stock market opens Friday.

The company posted a loss of 1.6 billion dollars (£1.25 billion) or 38 cents per share, in the April-June period.

That’s down from a profit of 1.5 billion dollars (£1.17 billion), or 35 cents per share, a year earlier. Adjusted earnings excluding special items were 2 cents per share.

Revenue slid 1% to 12.8 billion dollars (£10.06 billion).