Intel shares dropped by as much as 13% in after-hours trading after the chipmaker announced plans to lay off over 15% of its employees as part of a $10 billion cost-reduction plan. The company also reported earnings per share of 2 cents, adjusted compared to the expected 10 cents, and revenue of $12.83 billion, slightly below the expected $12.94 billion. The company’s revenue declined by 1% year over year in the fiscal second quarter, with a net loss of $1.61 billion or 38 cents per share.
The Client Computing Group, responsible for PC chips, saw revenue of $7.41 billion, up 9% from the previous year. The Data Center and AI unit posted $3.05 billion in revenue, down 3% from the year before. Intel announced plans for an adjusted net loss of 3 cents per share in the fiscal third quarter, with revenue projected to be between $12.5 billion to $13.5 billion, below analyst expectations.
During the fiscal second quarter, Intel announced a new joint venture with Apollo for a chip manufacturing plant in Ireland and introduced new server processors and an accelerator for AI tasks. The company also revealed that the U.S. Commerce Department had revoked export licenses for consumer items to a customer in China, believed to be Huawei. Despite this, Intel’s revenue for the second quarter fell within the previously announced range of $12.5 billion to $13.5 billion.
Intel’s workforce currently stands at 125,300 employees, and the announced layoffs could affect over 18,700 people. The company expects around $20 billion in cost cuts for this year, $17.5 billion in 2025, and more in 2026. Year-to-date, Intel stock has dropped by 42%, while the S&P 500 index has seen a 14% increase. Executives will be discussing these results with analysts in a conference call scheduled for 5 p.m. ET. Please stay tuned for updates on this developing story.
