Intel Announces Massive Job Cuts to Revive Business
In a bold move to compete with its rivals, US chip maker Intel has revealed plans to slash more than 15,000 jobs. The announcement sent shockwaves through the market, causing the company’s shares to plummet by up to 20% and triggering a domino effect on other tech giants.
The news hit Asian stock markets hard, with Japan’s Nikkei share index experiencing its largest percentage fall since the start of the pandemic in March 2020. Japanese tech firms were among the hardest hit, contributing to a steep drop in overall market performance.
Concerns about the strength of the US economy were further fueled by a gloomy survey of US manufacturing firms, leading to anxiety about the upcoming jobs report. This led to a decrease in major US share indexes, with big names like Amazon seeing a significant decline in after-hours trading.
Amazon’s shares dropped over 4% after the company reported a slower sales growth rate and predicted further weakening in the upcoming months. This pressure on margins comes as Amazon invests in areas like artificial intelligence, intensifying competition in the tech sector.
Intel’s struggles have been exacerbated by the rise of competitors like Nvidia, known for its advanced AI chips. The company reported a 1% decline in sales in the last quarter and warned of a challenging second half of the year.
CEO Pat Gelsinger acknowledged the need for drastic changes, stating that Intel must “fundamentally change the way we operate.” This includes cutting back on investments and suspending dividend payments to weather the storm.
On a brighter note, Apple saw a rebound in sales, driven by growth in its services division and strong performance in Macs and iPads. The company remains optimistic about the potential of AI, with recent releases of AI-powered features enhancing user experience.
Apple CEO Tim Cook emphasized the company’s commitment to AI technology, signaling continued investments in this area. Despite a slight decline in iPhone sales, Apple’s overall revenue saw a positive trajectory, buoyed by its services segment.
With the tech industry facing intense competition and market volatility, companies like Intel and Apple are navigating choppy waters as they adapt to evolving consumer demands and technological advancements.
