Intel to layoff more than 15% of workforce — almost 20,000 employees — encountered Meteor Lake yield issues, suspends dividend

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Intel to layoff more than 15% of workforce — almost 20,000 employees — encountered Meteor Lake yield issues, suspends dividend

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Intel announced today that it plans to lay off more than 15% of its workforce by the end of the year, meaning roughly 20,000 employees or more

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, amid troubling financial results this quarter. The company also announced that it has encountered yield issues with its Meteor Lake processors, which negatively impacted the bottom line. The company also plans to suspend its dividend in the fourth quarter.

Intel CEO Pat Gelsinger

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. He cited that the company plans to reduce spending by $10 billion in 2025 with the move. The company will offer employees buyouts and early retirement options. Analyst Patrick Moorhead said that Gelsinger told him about the Meteor Lake yield issues, as you can read if you expand the tweet below.

It was a very rough Q2 for $INTC. And that guide… Thanks, @Pgelsinger, for the time to discuss.It appears that there were yield/throughput issues on Meteor Lake, negatively impacting ****** margins. When you have to get the product to your customers, and you have wafers to… pic.

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.com/pHU66xvFe7

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Here are the most relevant bullet points from the

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:

• Implementing comprehensive reduction in spending, including a more than 15% headcount reduction, to resize and refocus.
• Suspending dividend starting in the fourth quarter of 2024. The company reiterates its long-term commitment to a competitive dividend as cash flows improve to sustainably higher levels.
• Reducing Operating Expenses: The company will streamline its operations and meaningfully cut spending and headcount, reducing non-GAAP R&D and marketing, general and administrative (MG&A) to approximately $20 billion in 2024 and approximately $17.5 billion in 2025, with further reductions expected in 2026. Intel expects to reduce headcount by greater than 15% with the majority completed by the end of 2024.
• Reducing Capital Expenditures: With the end of its historic five-nodes-in-four-years journey firmly in sight, Intel is now shifting its focus toward capital efficiency and investment levels aligned to market requirements. This will reduce ****** capital expenditures* in 2024 by more than 20% from prior projections, bringing ****** capital expenditures in 2024 to between $25 billion and $27 billion. Intel expects net capital spending* in 2024 of between $11 billion and $13 billion. In 2025, the company is targeting ****** capital expenditures between $20 billion and $23 billion and net capital spending between $12 billion and $14 billion.
• Reducing Cost of Sales: The company expects to generate $1 billion in savings in non-variable cost of sales in 2025. Product mix will continue to be a headwind next year, contributing to modest YoY improvements to 2025’s ****** margin.
• Maintaining Core Investments to ******** Strategy: The company continues to advance its long-term innovation and path to leadership across process technology and products, and the increased efficiency from its actions is expected to further support its **********. In addition, Intel continues to sustain investments to build a resilient and sustainable semiconductor supply chain in the ******* States and around the world.

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#Intel #layoff #workforce #employees #encountered #Meteor #Lake #yield #issues #suspends #dividend

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