Computer components and semiconductor maker Intel saw its shares plummet by more than 26% on Friday. According to Bloomberg, this was the worst single-day performance by the company’s stock in 40 years.
Intel’s disastrous day was a result of a disappointing earnings report as well as the announcement of a major restructuring plan that will include layoffs of 15% of its workforce and suspension of dividend payments.
Intel reported $0.02 in earnings per share (EPS) alongside revenue of $12.8 billion, a drop from $0.13 EPS and revenue of $12.9 billion in the second quarter of 2023. The analysts expected $0.10 in EPS and $12.9 billion in revenue. The company also said it forecasts between $12.5 billion and $13.5 billion in EPS in the current quarter, while analysts expect $14.3 billion.
“Our second-quarter financial performance was disappointing, even as we hit key product and process technology milestones,” Intel’s CEO Pat Gelsinger said in a statement.
Earlier this week, multiple media outlets reported that Intel will cut thousands of jobs and increase its spending in technology development, improving its manufacturing capabilities and expanding its reach in global markets. This is part of the strategy the company is employing to gain back a significant share of the PC chip market it previously lost to competitors like Advanced Micro Devices (AMD) and Qualcomm and get into the booming artificial intelligence (AI) chip market.
Intel’s stock closed at $21.48 per share on Friday. It’s the lowest the stock has been since 2013 and is currently 55.06% down year-to-date.