Intel said third-quarter revenue would be well below analysts' expectations and announced more than 15,000 layoffs. Intel shares fell 14% after hours. The company on Thursday forecast current-quarter revenue of $12.5 billion to $13.5 billion. According to data compiled by agencies, analysts on average expected $14.38 billion. Loss per share, excluding special items, is expected to be 3 cents, compared with expectations for earnings of 30 cents per share.
Intel said it plans to lay off more than 15% of its approximately 110,000 employees. The company will also suspend dividends starting in the fourth quarter until "cash flow improves to a more sustainable level," according to the statement.
While CEO Pat Gelsinger has laid out a massive spending plan to restore Intel's industry status, he faces challenges improving the company's products and technology quickly enough to retain customers.
"Revenue did not meet our expectations," Chief Financial Officer Dave Zinsner said in an interview. "The financial situation did not meet our expectations." The layoffs were necessary "to allow us to achieve a more sustainable business development model."
Intel's second-quarter earnings, excluding special items, were 2 cents per share on revenue of $12.8 billion, down 1%. Analysts had expected earnings of 10 cents per share and revenue of $12.95 billion.