The company's decision to more rapidly produce Core Ultra PC chips that can handle artificial intelligence workloads contributed to the loss, according to CEO Pat Gelsinger. Additionally, Intel decided to more quickly move Intel 4 and 3 chip wafers from a plant in Oregon to one in Ireland, leading to higher costs in the short term but a wider gross margin later. The company's Client Computing Group that makes PC chips contributed $7.41 billion in revenue, up 9%, while the Data Center and AI unit posted $3.05 billion in revenue, down 3%.
Key takeaways:
- Intel shares dropped by 20% after the company announced a plan to lay off over 15% of its employees as part of a $10 billion cost-reduction plan and reported lower results than expected.
- The company will not pay its dividend in the fiscal fourth quarter of 2024 and plans to lower full-year capital expenditures by over 20%.
- Intel's revenue declined 1% year over year in the fiscal second quarter, and the company reported a net loss of $1.61 billion.
- Intel plans to make significant cuts in the coming years, expecting around $20 billion in cuts this year, $17.5 billion in 2025, and more in 2026.