OUCH: Intel to Cut Jobs and Suspend Dividend in Cost-Saving Push.

Intel plans to lay off thousands of employees this year and pause dividend payments as part of a broad cost-saving drive more than three years into Chief Executive Pat Gelsinger’s turnaround effort.

Gelsinger laid out the plan to reduce costs by more than $10 billion next year as the chip maker reported second-quarter sales of $12.8 billion, down 1% and below analysts’ forecasts in a FactSet survey. Reaching that cost-reduction goal will require cutting jobs and lowering capital expenditures, among other moves, the company said.

The company’s stock fell 20% in after-hours trading.

Intel has struggled to gain a foothold in the market for artificial-intelligence chips that have driven the sales and valuations of Nvidia and some other rival chip makers. The heavy spending on those AI-focused chips to build out big data centers also has cut into demand for the non-AI processors for data centers that have long been central to Intel’s business.

Intel missed the boat on mobile over 15 years ago, repeatedly failed to stick to its own roadmap on x86 chip development in the years since, and got caught flat-footed on AI chips, too.

It’s been a long time since the days of “only the paranoid survive.”