The inventory of Intel (INTC -26.06%) is getting crushed in Friday’s buying and selling. The corporate’s share value was down 29% as of 10:30 a.m. ET as we speak, in response to information from S&P World Market Intelligence.

Intel revealed its second-quarter outcomes after the market closed yesterday, and gross sales and earnings missed Wall Avenue’s expectations. Making issues worse, the semiconductor firm additionally issued weak steerage, introduced in depth layoffs, and mentioned that it could be suspending its dividend.

A disastrous quarter

For the second quarter, Intel reported adjusted earnings per share of $0.02 on gross sales of $12.83 billion. The efficiency fell far in need of the common analyst goal, which had known as for per-share earnings of $0.10 on income of $12.98 billion.

Intel’s outcomes have been very disappointing, they usually arrived along side extra dangerous information. As a part of in depth price chopping, the corporate will lay off 15% of its workforce. It should additionally droop its dividend within the fourth quarter.

Intel is firmly in turnaround mode, and it is in search of methods to chop prices and grow to be a leaner working machine. Suspending the dividend with the intention to refocus capital on driving sustainable progress may have payoffs down the road, however buyers clearly hate the transfer. The scope of the upcoming layoffs additionally raises some huge questions.

Many tech corporations have carried out substantial worker reductions lately, however the scope of Intel’s upcoming discount is notable. With the corporate attempting to reposition itself to benefit from the rise of synthetic intelligence (AI) and different huge traits, letting so many workers go raises questions on its aggressive positioning. On the very least, it means that administration believes the enterprise has been method overstaffed in areas that are not poised to drive robust efficiency.

Intel points dreary steerage

For the third quarter, Intel is guiding for gross sales to come back in between $12.5 billion and $13.5 billion. Previous to the corporate’s replace, the common Wall Avenue goal had known as for the enterprise to ship gross sales of $14.39 billion within the interval.

The chip specialist’s earnings steerage was much more distressing. It expects to publish an adjusted lack of $0.03 per share within the third quarter. For comparability, the common analyst estimate was for an adjusted per-share revenue of $0.30 within the interval.

Traders had been hoping that the corporate would see stronger gross sales and margin tailwinds from AI-enabled computer systems and information facilities, however it appears like these anticipated catalysts will fail to materialize within the close to time period.