Chip-maker Intel will axe more than 15,000 jobs and pause "non-essential" projects, particularly within marketing and R&D, in an effort to revive profits to catch up with rivals such as Nvidia and AMD.
Intel's share price fell by 20% following the announcement. The move comes after the company reported a $1.6bn loss in the April-June period, compared with a profit of $1.5bn a year earlier.
Shares in other tech giants have also been affected.
Amazon shares dropped more than 4%, after the e-commerce giant reported a 10% rise in sales to $148bn.
That marked a slowdown from the prior quarter and it forecast further weakening in the months ahead, putting pressure on margins, even as the firm ramps up investments in areas such as artificial intelligence (AI).
Intel has been struggling as businesses turn to rivals such as Nvidia, known for its powerful AI chips.
The company said sales fell 1% year-on-year in the three months to June and warned that the second half of the year would be worse than expected.
That represented a deceleration from the previous quarter, and the company predicted further weakening in the coming months, which will put pressure on margins despite increasing investments in areas like artificial intelligence.
Intel has faced challenges as businesses turn to competitors like Nvidia, renowned for its high-performance AI chips.
The company reported a 1% year-on-year decline in sales for the three months ending in June and cautioned that the second half of the year would be worse than anticipated.
Chief executive Pat Gelsinger said to staff that the situation required "bolder actions" and the firm had to "fundamentally change the way we operate".
Intel previously conducted a significant round of layoffs in October 2022, when it also announced plans to cut between $8 billion and $10 billion in costs annually through 2025. They ended up making up some of this headcount later by rehiring.
The company confirmed that the majority of the layoffs announced today will be completed by the end of 2024. Spokesperson Penelope Bruce confirmed that these are new layoffs, and the 4 percent decrease from 130,700 employees in March to 125,300 employees in June is not included in the total.
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