Intel shares plummet after Q2 miss, job cuts, weak guidance

Intel (INTC) shares plummeted after posting second quarter results that missed estimates on both the top and bottom lines, providing weak Q3 guidance, and announced it's slashing 15,000 jobs and suspending the dividend. CEO Pat Gelsinger spoke with Yahoo Finance about the restructuring, saying Intel is taking "decisive steps" as they work to make the company sustainable in the long term.

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This post was written by John Lesinski.

Video Transcript

Switching gears here.

Let's talk a little Intel.

Intel shares plunging this morning on track for its largest decline since September of 2000.

After the chip maker gave weaker than expected guidance and announced plans to slash 15,000 jobs.

Our executive editor Brian Sazi spoke with Ceo Pat Gelsinger about the restructuring and here's what he had to say, this is the biggest restructuring of Intel, I'd say since the memory microprocessor decision four decades ago, you know, we laid out the new operating model and we're taking decisive steps to execute on the process and product work that we've done to now combine it with an operating model to make us effective for the long term.

So it's not just that and of course, that is giving us a little bit more insight into how the top brass, the executives are thinking about this larger runway and and ultimately, how this is going to take some time for Intel to really get to the type of business that it wants to be.

What else are they doing?

They're slashing jobs.

As we mentioned, they're also suspending their dividend in this near term period of time.

So there was a lot for investors to really have to wrap their minds around what the thesis is for themselves and, and whether or not they believe Intel could reach that within a two year, three year, maybe even a four year window here.

Yeah.

II I think the reaction from the street isn't necessarily a surprise given what was in this report.

I think there is pressure on CEO Pat Gelsinger, what exactly needs to happen in order to right the ship, they are looking to cut costs.

They mentioned the the significant head count reduction.

They they mentioned the fact that they are suspending their dividend.

And this of course, on the heels of the revenue outlook also missing the street's expectations.

So he had to do something right.

And and I think when you take a look at the probability maybe of some of these surprises and given the streets reaction and given the high bar that was set going into this earnings season, maybe not necessarily a sh a shock when you take a look at some of the selling action going forward.

But I think the big question for Intel is what exactly it's going to take to write the ship.

This is also not necessarily a new question that investors are asking themselves.

This very much has been some of the conversations surrounding Intel surrounding their Ceo Pat Gelsinger over the last several quarters.

Obviously, on the heels of this brand, the pressure really starts to ramp up and you are hearing some calls just for exactly, maybe what ultimately needs to happen at Intel and how long potentially this is going to take in order to convince customers out there that their chips, that their, that their products are worth betting on.

They're trying to turn a yacht into a interval cruise line essentially.

Uh, and while they're at sea right now and that is, that's what's happening.

And look, I, I mean, yeah, extremely complicated.

We're talking about a company that's trying to build out more foundry, more fabrication for itself.

So it doesn't have to rely on the services of others to do that.

And that's going to be, it's essentially the, the analogous term here that I was using, it's cruise line for itself, uh in the future here.

So, uh, you can show them that way, whichever one you want at home, folks.