Intel stock nosedived on aggressive $10bn cost-cutting plan

Intel (NASDAQ:INTC) shares nosedived in Friday’s deals, losing 27%, after news of huge job cuts added to earning’s headaches that emerged with last night’s earnings.

The microchip firm is axing more than 15,000 jobs as part of a plan to cut costs by $10 billion.

It also announced it would suspend its dividend payout for shareholders, starting in the fourth quarter.

Intel’s earnings report for its second quarter, released after Thursday’s close, missed market expectations for both sales and profit.

Revenue totalled $12.8 billion, below the forecasted $12.9 billion, and earnings per share were 2 cents, which was below the expected 10 cents.

Intel’s aggressive cost-cutting is necessary to improve operational efficiency and address the high costs associated with ramping up AI chip production, chief executive Pat Gelsinger said.

Looking ahead, Intel pitched new and lower revenue guidance for its third-quarter anticipating between $12.5 billion to $13.5 billion, versus analyst consensus of $14.4 billion.

This is after $8.5 billion in grants and $11 billion in loans from the US government, which is pushing for the American semiconductor firm to build new plants and increase the country’s domestic supply of microchips.

In New York, Intel stock was down $7.99 or 27.5% at $21.07.