In January, when Intel reported on one of its worst financial quarters in years, the chip giant worked to maintain investor confidence by keeping its dividend steady at $0.365 per share. Less than a month later, he’s singing a very different tune. the company today Announced that it was revising its dividend to $0.125 a share, down almost two-thirds, as part of a bigger effort to conserve cash amid a very tough economic environment, and how it’s playing out specifically in the tech sector.
The dividend cut underscores the darker outlook Intel has for the coming year. The company’s dividend has been level at $0.36 for many quarters and has fallen below $0.30 since 2017And while dividends don’t affect non-investors, they can be used to keep investors happy even in difficult times, like a bad stock slide or disappointing earnings, and also simply to keep stocks at a premium in general: Intel paid some $80 billion in dividends since 1992, they are also a benchmark for the company’s largest status.
Intel explains the cut in the context of increased efforts by the company to cut up to $3 billion this year and up to $10 billion per year by 2025, which it will do by phasing out certain operations, laying off employees, reducing compensation. of executives and making other cuts. It is also betting more on its own technology by developing its own internal casting, which will require some investment (and, of course, carries its own risk), coupled with the ever-clear and present threat of competition in the area of cutting-edge chip design. CEO Pat Gelsinger said the last of these is still on the way.
“The prudent allocation of capital from our owners is important to enable our IDM 2.0 strategy and maintain our momentum as we rebuild our execution engine,” it said in a statement today. “We remain on track to deliver five nodes in four years and continue to expand the IFS (Intel Foundry Services) customer base. We’re on the ramp for 13th Gen Intel® Core™ Scalable and 4th Gen Intel® Xeon® processors, looking forward to launching Meteor Lake and Emerald Rapids in 2023 and Granite Rapids and Sierra Forest in 2024 ”.
Intel in October 2022 was reportedly preparing for thousands of job cuts in the next quarter. A spokesperson confirmed today that while it has reduced its workforce, it has yet to confirm the exact number of people affected. The company at the end of 2022 employed almost 132,000 people. it is also cut compensation for executives and managers, including a 25% cut for Gelsinger himself.
In the most recent quarter, the company’s revenues were down 32% from a year earlier to $14 billion, also missing analysts’ estimates. Now all eyes are on how the company will fare in the coming year with current and future orders. gelsinger fired recent reports alleging chip delays as “rumors” in a call today.
