Intel to cut 17,500 jobs

(Patria) - American tech giant Intel announced on Thursday that it will lay off nearly 18,000 workers and reduce capital expenditure to stabilize the operations of its loss-making chip manufacturing division.

- I need fewer people at headquarters and more in the field, with customers - said Intel CEO Pat Gelsinger.

Around 17,500 workers will be laid off, most of them by the end of the year.

As of June 29, Intel had 116,500 employees, excluding certain subsidiaries.

The company also announced that it will reduce operating costs and capital expenditures by more than $10 billion next year, more than previously planned.

Capital expenditures are expected to be $21.5 billion next year, which would be lower than in 2024, according to the midpoint of the range stated in the official forecast, Reuters notes.

This year, they are expected to remain at last year's level.

Intel closed the second quarter with a net loss of $1.6 billion. In the same period last year, it recorded a net profit of $1.5 billion.

The chip manufacturing division operated with a net loss of $2.83 billion, an increase of 51.3 percent compared to last year.

Intel has been noticeably lagging behind Taiwan's TSMC in acquiring lithography machines for chip production based on ultraviolet technology and is now trying to catch up.

In April, they were the first to assemble the new High NA EUV machine from Dutch company ASML.

The new machines are more expensive, but Intel believes they will help them produce smaller components on chips, which will ultimately make them better than the competition.

Management also decided to suspend dividend payments in the fourth quarter.

- Our goal is to pay a competitive dividend over time, but for now, we want to focus on the balance sheet, on deleveraging - Gelsinger said.