Intel shares fall as company announces large layoffs, cost-cutting measures
(MENAFN) Shares of Intel Corp. experienced a dramatic 28 percent drop on Wall Street on Friday, following the company's announcement of a significant restructuring plan that includes laying off over 15 percent of its workforce by the end of the year. This substantial decline resulted in the Semiconductor giant losing more than USD30 billion in market value, with shares trading at USD20.95, down 28.08 percent by 14:05 GMT.
The decision to cut costs by USD10 billion involves reducing Intel's workforce by approximately 18,000 employees out of its 125,000-strong workforce as of the end of 2023. Intel, which has been struggling to keep pace with competitors in the rapidly evolving AI chip sector, revealed this drastic measure as part of its strategy to improve financial performance and operational efficiency.
In the second quarter, Intel reported a turnover of USD12.8 billion, falling short of analysts' expectations and marking a 1 percent decrease compared to the same period in 2023. The company's financial struggles were further highlighted by a net loss of USD1.6 billion, a stark contrast to the USD1.5 billion net profit recorded a year earlier. Additionally, Intel announced that it would not be distributing dividends at the end of this year, signaling deeper financial challenges and a need to conserve resources amid a turbulent market environment.
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