Intel to cut 15% of its workforce to reduce spending

By Ovunc Kutlu

ISTANBUL (AA) - Intel is planning to cut its workforce by 15% as it implements a comprehensive plan to reduce spending, according to its financial results statement released Thursday.

"The actions include structural and operating realignment across the company, headcount reductions, and operating expense and capital expenditure reductions of more than $10 billion in 2025 compared to previous estimates," it said.

"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 to support the company’s long-term strategy," it added.

The chipmaker aims to reduce research and development, marketing and general and administrative spending to approximately $20 billion in 2024 and around $17.5 billion in 2025, according to the statement.

Capital expenditures are expected to be reduced by more than 20% in 2024 from prior projections to bring total capital expenditures to between $25 billion and $27 billion this year, it said.

"Intel expects net capital spending in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting gross capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion," it added.

The US-based tech major said it expects to generate $1 billion in savings in non-variable cost of sales next year.

The company posted a net loss of $1.6 billion in the second quarter, compared to a net income of $1.5 billion in the same period last year.

Revenue was just down 1% to $12.8 billion from $12.9 billion during that period.

Amid the new plan of cost reductions, Intel shares plummeted 17.56% in after-hours trading on the Nasdaq.