US company Intel to fire 17000 employees due to financial loss
US company Intel is about to cut 15% of its workforce which means it will fire 17000 employees to recover its manufacturing financial loss. It is based in Santa Clara, California.
The company will also stop giving our regular payments to its shareholders later this year (fourth quarter of 2024). Intel is making these changes to try to fix problems and improve its money-losing manufacturing part of the business.
The company stated that its revenue for the third quarter will be lower than the market expected. This is because companies are spending less on the traditional computer chips used in data center semiconductors.
Instead, there is a growing focus on AI chips, an area where intel is not as advanced as some of its competitors.
Hence, Intel’s shares dropped by 20% in after-hours trading. It caused the company to lose over $24 billion in market value. After-hours trading starts once the day’s normal trading session closes at 4 p.m. and ends at around 8 p.m.
Following this, Intel’s chip shares fell by 7% due to a big drop in the value of US chip stocks after a cautious prediction from the company, Arm Holdings on August 1, 2024.
Hence, this share drop did not affect the overall chip industry much. Other companies like Nvidia and AMD experienced their stock prices go up after trading hours. Because they are well-prepared for the growing AI market.
Click here to read the updates on Nokia’s plans to cut massive jobs to lower costs
CEO of Intel, Pat Gelsinger stated that their company is cutting jobs to have fewer people at headquarters and more people are working directly with customers.
He said that although the company aims to make regular payments in the future. So, it needs to focus on improving its financial situation right now. Hence, US company Intel will fire its 17000 employees.
It is significant to note that Intel had 116,500 employees (not counting some smaller companies they own). They will cut most of the jobs by the end of 2024.
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