Intel to cut 15% of headcount, reports quarterly guidance miss

Intel reported disappointing Q2 2024 earnings, leading to a significant drop in its stock price. The company announced plans to cut approximately 15,000 jobs as part of a $10 billion cost-reduction strategy. In the fiscal second quarter, Intel posted a net loss of $1.61 billion, or 38 cents per share, compared to a profit of $1.47 billion, or 35 cents per share, in the same period last year. Revenue fell 1% year-over-year to $12.83 billion, missing analyst expectations of $12.94 billion. The Client Computing Group, which produces PC chips, generated $7.41 billion in revenue, slightly below expectations, while the Data Center and AI unit reported $3.05 billion, also falling short of forecasts. For Q3, Intel anticipates an adjusted net loss of 3 cents per share on revenue between $12.5 billion and $13.5 billion, significantly lower than analyst predictions of 31 cents per share and $14.35 billion in revenue. CEO Pat Gelsinger emphasized the need to align costs with the new operating model, citing high costs and low margins as key issues. Additionally, Intel will not pay a dividend in Q4 2024. The company has lost 42% of its stock value this year, contrasting with a 14% gain in the S&P 500. Despite these challenges, Intel is pursuing growth in AI-related products and has announced an $11 billion investment in a joint venture for a chip manufacturing plant in Ireland.