Shares in American semiconductor manufacturer Intel fell 28% on Wall Street on Friday morning in New York after the group announced a major social plan to lay off more than 15% of its staff by the end of the year.
The American giant thus lost on paper more than 30 billion dollars of stock market valuation while its share price was worth 20.95 dollars, a fall of 28.08% at 10:05 a.m. EDT.
Intel, which has lagged behind its competitors in chips suited to generative artificial intelligence (AI), announced on Thursday that it plans to cut its costs by $10 billion by cutting 15% of its workforce.
The American giant had nearly 125,000 employees at the end of 2023. This means that around 18,000 people are expected to lose their jobs.
In the second quarter, the group achieved a turnover of 12.8 billion dollars, less than expected by analysts and down 1% compared to the same quarter of 2023.
Above all, it posted a net loss of $1.6 billion, compared to a net profit of $1.5 billion a year ago.
The group also announced that it would not pay a dividend at the end of this year.
“Our financial performance was disappointing in the second quarter, even though we achieved key technology milestones,” Intel CEO Pat Gelsinger said in the group’s earnings release.
The company faced “headwinds” in the second quarter that hampered production of components for the next generation of AI-enabled computers, according to Chief Financial Officer David Zinsner.
“By orchestrating cost reduction, we are taking proactive steps to improve our profits,” he said.
Intel’s competitors, such as American groups Nvidia and AMD, which design semiconductors, and the Taiwanese giant TSMC, which manufactures cutting-edge chips, are capitalizing on the wave of generative AI launched by OpenAI and its ChatGPT platform in late 2022.
In an effort to reduce its dependence on Asia, the United States is spending tens of billions of dollars to boost local production of semiconductors.
Intel is among the beneficiaries of this strategy. But the company has fallen behind in the most expensive and in-demand chips right now, those suited to the servers on which generative AI models are trained.
So it’s betting on components for devices with new AI capabilities, including new laptops unveiled this year by HP, Microsoft and others.