Intel CEO Wants To Slim Down Company, Cut Costs: Report

Intel's CEO will reportedly present its board of directors with a plan to sell off unnecessary businesses and slash spending in the wake of the chip maker's recent $1.6 billion quarterly loss.

Pat Gelsinger and key company executives are expected to make the pitch at a meeting later this month, Reuters said Sunday, citing a source familiar with the matter.

The proposal reportedly includes selling Intel's programmable chip unit Altera and may involve delaying or cancelling construction of a $32 billion factory in Germany.

Intel declined to comment, Reuters said.

Last month, Intel reported a net loss of $1.6 billion, or 38 cents per share, during the second quarter of 2024, compared to income of $1.5 billon, or 35 cents per share, during the same period last year.

Revenues from Altera were down 57%, to $381 million, from $848 million.

The company announced $10 billion in spending cuts that would save $10 billion by laying off 15% of its workforce, about 17,500 employees, and suspending dividend payments starting in the fourth quarter of 2024.

It also issued a weaker-than-expected forecast for the third quarter.

The disastrous earnings report was followed by the surprise Aug. 22 resignation of board member and chip industry veteran Lip-Bu Tan.

On Tuesday, Reuters reported Tan had clashed with Gelsinger and other directors over matters including Intel's artificial intelligence strategy and turnaround plan, citing three sources familiar with the matter.

Two days later, Gelsinger tried to reassure investors at a Deutsche Bank conference in California, where he acknowledged "a difficult few weeks" and said the company was "working hard to address the issues."

Intel's stock price closed Friday at $22.04, up nearly 9.5% but down about 54% since the start of the year.