Intel unveils plans to axe 15% of workforce in cost saving initiative

Tech giant Intel recently revealed that it would be cutting more than 15% of its total workforce, as well as stopping its dividend in the last quarter of this year. This move comes in an attempt to implement a new strategy aimed at boosting the company’s loss-making manufacturing arm. 

The cost reduction plan worth about $10bn (€9.25bn) is expected to lay off approximately 17,500 employees globally, with most posts due to be cut by the end of this year. 

Apart from a decreasing the staff headcount, the plan will also focus on building a sustainable financial model to speed up profitable growth. This will include reducing capital and operating expenses, as well as the cost of sales. However, the company has revealed that it plans to maintain its core investments. 

Regarding the dividend suspension, Intel reconfirmed that although it is committed to a competitive dividend in the long-term, at the moment, its focus is on deleveraging its balance sheet. 

This restructuring plan also comes as Intel has been struggling recently due to the US revoking some export licences, restricting it from selling certain semiconductor chips to Chinese clients such as Huawei. Back in May this year, Intel also warned that this decision would impact its revenues in the second quarter. 

The company released its second quarter earnings on Thursday, reporting a revenue of $12.8bn (€11.83bn) for the quarter, which was a 1% decrease from Q2 2023. The gross margin was 35.4% in Q2 2024, down from 35.8% in the second quarter of 2023. 

Intel also reported $2.3bn in cash from operations for the second quarter of the year, and paid $0.5bn in dividends during this period. 

It also issued a revenue warning for the third quarter of the year. Intel now estimates Q3