Intel Corp (NASDAQ:INTC, ETR:INL) shares slumped after the chipmaker unveiled plans to cut over 15,000 jobs in a bid to rightsize and save up to US$10 billion (£7.9 billion).
Some 15% of staff will be laid off through the move to “resize and refocus,” Intel announced in second-quarter results on Thursday.
This came after the company revealed a wider US$1.6 billion loss for the quarter and a 1% fall in revenue to US$12.8 billion.
Shares were trading 21% lower at US$22.85 in pre-market trading on the news.
By stopping “non-essential work,” reviewing “all active projects” and suspending dividend payments from the fourth quarter, Intel said it planned to save US$10 billion next year.
“As a result of these actions, Intel aims to achieve a clear line of sight toward a sustainable business model with the ongoing financial resources and liquidity needed,” Intel added.
Losses largely emerged in Intel’s foundry business, as the firm’s PC wing remained profitable.
“Intel is in the midst of massive technological transitions that necessarily investors have little insight into,” Wedbush analyst Matt Bryson commented.
“We believe these questions will weigh on sentiment until Intel can offer some more promising concrete signs of progress.”