Intel Sued by Shareholders for Concealing Problems, Massive Layoffs and Dividend Suspension

TapTechNews August 8th news, according to Reuters, the US chip giant Intel was sued by shareholders collectively on Wednesday. The plaintiffs accused the company of concealing serious operational problems, resulting in poor performance, large-scale layoffs and suspension of dividends, and the stock price evaporated by more than 32 billion US dollars (TapTechNews note: currently about 229.483 billion yuan) in a single day.

The lawsuit document has been submitted to the San Francisco Federal Court. Intel's chief executive officer, Pat Gelsinger, and chief financial officer, David Zinsner, are also listed as defendants.

Shareholders said that Intel disclosed on August 1 that its foundry business (producing chips for other companies) was in trouble, with billions of dollars in additional expenses while revenue was declining, and this news caught them by surprise. They accused the company's previous statements about the business and manufacturing capabilities of being significantly false or misleading, resulting in the stock price being hyped up from January 25th to August 1st.

Intel has not responded to this for the time being.

Intel announced last Thursday that it would lay off more than 15% of its employees, involving 15,000 people, and suspend dividends starting from the fourth quarter. The company plans to save 10 billion US dollars in costs through reorganization by 2025. In addition, Intel had a net loss of 1.61 billion US dollars in the second quarter, and revenue declined by 1% to 12.83 billion US dollars.

For a long time, Intel has been struggling in the highly competitive chip market and has difficulty benefiting from the artificial intelligence boom. Its main competitors include AMD, NVIDIA, Samsung Electronics, and TSMC.

The Intel stock price plunged 26% to 21.48 US dollars on August 2 (the day after the company announced quarterly results, layoffs and suspension of dividends), and then continued to decline. As of the close on Wednesday, the stock price fell 3.6% to 18.99 US dollars, having fallen 34.6% compared to before the announcement.