Intel to layoff around 17,500 people as shares fall

Intel will cut more than 15 per cent of its workforce and suspend its dividend starting in the fourth quarter as the chipmaker pursues a turnaround centered around its loss-making manufacturing business.

It also forecast third-quarter revenue below estimates, grappling with a pullback in spending on traditional data center semiconductors and a focus on AI chips, where it lags rivals.

Shares of Santa Clara, California-based Intel slumped 20 per cent in extended trade, setting it up to lose more than $24 billion in market value. The stock had closed down seven per cent on Thursday, in tandem with a plunge in US chip stocks after a conservative forecast from Arm Holdings on Wednesday.

The results did not rock the broader chip industry. AI powerhouse Nvidia and smaller rival AMD ticked up after hours, underscoring how well-positioned they were to take advantage of the AI boom.

"I need less people at headquarters, more people in the field, supporting customers," CEO Pat Gelsinger told Reuters in an interview. On the dividend suspension, he said: "Our objective is to ... pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging."

The layoffs will impact roughly 17,500 people.

Intel, which employed 116,500 people as of June 29, excluding some subsidiaries, said the majority of the job cuts would be completed by the end of 2024.