Despite a boom in artificial intelligence (AI) related stocks, Intel (NASDAQ:INTC) stock is down by 36% so far this year as competitors have managed to outperform the U.S. semiconductor company.
In a plan to cut costs and become more lean, Intel will lay off thousands of workers according to Bloomberg. The job cuts could be announced as soon as this week and could coincide with the company’s second-quarter earnings on Thursday, Aug. 1 after the market close. Intel has a total of 110,000 employees.
Intel has received billions of dollars of subsidies from both state and local governments. In March, the White House announced that it had reached a preliminary agreement with Intel that would see it receive up to $8.5 billion in direct funding and $11 billion in loans through the CHIPS and Science Act.
Still, competitors like Advanced Micro Devices (NASDAQ:AMD) have been able to outpace the company in the chip race.
Intel Layoffs: Intel to Cut Thousands of Jobs
The planned layoffs come after Intel announced that it would begin cutting jobs in October 2022. That resulted in a 5% workforce reduction in 2023, bringing the year-end employee count to 124,800 compared to 131,900 in the year prior. Intel noted that it expected the layoffs to reduce costs by as much as $10 billion by 2025.
Intel isn’t giving up just yet, though. Former Micron (NASDAQ:MU) Senior Vice President of Technology Development Dr. Naga Chandrasekaran will join the company on Aug. 12 as its new Chief Global Operations Officer. At Intel, Chandrasekaran will oversee global manufacturing in the Foundry unit.
“Naga is a highly accomplished executive whose deep semiconductor manufacturing and technology development expertise will be a tremendous addition to our team,” said Intel CEO Pat Gelsinger.
As for earnings, Wall Street expects revenue to grow by just 0.25% to $12.98 billion. That would mark the slowest quarter of growth since the third quarter of 2023. For context, AMD reported Q2 revenue growth of 9%.
Furthermore, Wall Street expects Intel to post an EPS loss of 11 cents compared to 35 cents a year ago.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
