Intel Faces Biggest Stock Slump in 50 Years Amid Mass Layoffs

Intel shares plummeted 30% on Friday, marking their steepest one-day decline since at least 1982.

The tech giant’s latest earnings report, which revealed a 1% drop in quarterly revenue to $12.83 billion, missing analyst forecasts of $12.94 billion, triggered the sell-off. Intel also announced significant job cuts, which contributed to the staggering stock decline.

Intel executives blamed unexpected market trends for the company’s disappointing performance, despite reaching product milestones. The chipmaker slashed its revenue forecast for the current quarter to between $12.5 billion and $13.5 billion, down from analyst expectations of $14.35 billion.

Intel CEO Pat Gelsinger said in a press release:

Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones. Second-half trends are more challenging than we previously expected, and we are leveraging our new operating model to take decisive actions that will improve operating and capital efficiencies.

The company will restructure and cut operating expenses by more than $10 billion next year as part of a cost-cutting drive. Executives believe these changes will set the stage for long-term success.

These measures, along with Intel’s disappointing earnings, sent shockwaves through the global semiconductor industry. Tokyo Electron’s 12% plunge in Japan dragged the Nikkei Stock Average to its worst day since 2020. The Netherlands’ ASML and Nvidia also suffered significant losses, falling over 8% and 7%, respectively.

Speaking to investors on Thursday, Gelsinger acknowledged that market conditions have slowed down the company’s near-term growth. However, he emphasized Intel’s ability to adjust its capital spending based on market fluctuations.