Intel to lay off 17,500 employees, or 15% of its total workforce, after losing half of its market cap this year

Intel announced on Thursday that it would lay off 17,500 employees, or more than 15% of its total workforce, in a bid to turn around its money-losing semiconductor manufacturing business.

The Santa Clara, California-based Intel currently employs 116,500 people as of June 29, excluding some subsidiaries. The company said that the majority of job cuts will be completed by the end of this year.

Facing a challenging market, Intel has forecast its third-quarter revenue to fall below market estimates. The company has been struggling with decreased spending on traditional data center semiconductors while trying to catch up in the AI chip sector, where it trails behind competitors.

So far this year, Intel’s shares have plummeted by 56 percent. The company has consistently lagged in technology compared to Taiwanese company TSMC and South Korean giant Samsung.

In extended trading, Intel shares dropped another 20%, which could result in a loss of more than $24 billion in market value. This followed a 7% drop on Thursday, mirroring a broader decline in U.S. chip stocks after Arm Holdings issued a conservative forecast on Wednesday, Reuters reported.

Despite Intel’s troubles, the broader chip industry remained stable. Nvidia, a leading player in the sector, saw its shares tick up in after-hours trading, highlighting its strong position to capitalize on the AI boom and underscoring Intel’s relative disadvantage.

“I need less people at headquarters, more people in the field, supporting customers,” CEO Pat Gelsinger told Reuters in an interview, talking about the job cuts. On the dividend suspension, he said: “Our objective is to … pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging.”

Intel is the latest in a series of tech companies to announce staff cuts. In recent months, tech companies, crypto exchanges, financial firms, and banks have reduced their headcount and slowed hiring as global economic growth weakens due to looming recession, inflation, and higher interest rates.

According to Layoffs.FYI, a site that tracks tech layoffs using data compiled from public reports, more than 384 tech companies have laid off 124,517 workers so far this year.