By D. Maan, Jadetimes News
Intel to Cut 15,000 Jobs as Market Shakes Continue
Intel is planning to reduce more than 15,000 jobs in the revival of the business and trying to reach competitors. Such an announcement heralded a sharp decline in the company's shares, which fell by as much as 20% and reported decreasing sales.
It roiled the rest of the tech sector, pulling down other technology stocks sharply with it, and played its part in a sharp fall in Asian stocks. Japan's Nikkei share index posted its biggest percentage fall since the outbreak of the coronavirus pandemic, diving 5.8%. By the end of the day, the Nikkei closed down 2,216.63 points at 35,909.70 in the second worst points drop in its history. Fears about the strength of the US economy also sent stocks lower.
An unsettling survey of US manufacturing companies came out that had some worried the economy might slow and heightened interest in the US jobs figures due out on Friday. All three of Wall Street's major stock indexes ended in the red on Thursday, and the shares of some of its marquee names such as Amazon suggested further declines in late trade. Amazon's shares fell more than 4% after the company reported a 10% increase in sales to $148 billion, slowing from the previous quarter, and fourth quarter estimates forecast further weakening in the coming months. That, in turn, is pressuring margins just as the retailer ramps up investments in areas like artificial intelligence.
Intel has faced headwinds in recent quarters as firms turn to rival chipmakers such as Nvidia, which makes highly sought after AI semiconductors. Intel's sales for the three months to the end of June were down 1% year on year but it warned of a worse than expected performance in the second half. "Our revenues have not grown as expected and we've yet to fully benefit from powerful trends, like AI," reads a memo to staff from Intel CEO Pat Gelsinger. The CEO went ahead to state that "bolder actions" needs to be taken with deep changes at the very core of how the company conducts business.
Among other such bancassurance measures, Intel has cut sharply its investment plans and suspended any dividend payments. "It's really having to pull back on spending on its data centers, and it's struggling to take market share from other providers, so it's a real shock to the market," said Lucy Coutts, investment director at JM Finn.
The same cannot be said of Apple, which announced some happy news: it had rebounded in sales this spring due to overcoming weaknesses in China and a dip in iPhone sales. Revenues for the three months ending in June reached $85.8bn, up 5% year on year, putting the company back in growth mode after a relative slump during the beginning of the year 2024. Apple said improvement of its software with increased AI power had customers convinced to purchase upgrades for their devices. Apple recently pushed new AI features out to developers in the United States, branded as "Apple Intelligence." Now, it gets easier with the latest changes for iPhone users to record and transcribe phone conversations, get personalized emojis, and even have a more conversational interaction with the voice assistant Siri.
"We remain incredibly optimistic about the possibilities of AI, and we will continue to make a significant investment in this technology," said Apple CEO, Tim Cook. Even as sales of iPhones slid 1%, more Macs and iPads helped sell alongside a record revenue from its services division in pushing up Apple's performance. These services include services like Apple Pay and Apple News.
While Intel faces major challenges and market reactions, Apple proves to remain resilient the development of AI into its product lines is proof of that.
