After realizing sales are waning, Intel has opted to shed over 15,000 jobs in an attempt to revive its dwindling fortunes and get ahead of the competition. The company’s stock nosedived as a result and took down other technology stocks alongside it. Stocks hit worldwide markets. Intel’s CEO, Pat Gelsinger, assured investors that primary changes had been needed in how the company was being run.

Intel, one of the largest US chipmakers, will cut over 15,000 jobs as part of its plan to return the company to health after a sales slump amid increasing competition. This sent Intel’s stock price down as much as 20% and took a toll on other tech stocks and global markets. Intel chief executive Pat Gelsinger said the firm needs to “fundamentally change” how it is operating as it takes on its challenges.

The job losses come in the wake of Intel struggling to keep up against competition from firms like Nvidia, famously known for its powerful AI chips. Intel has reported a 1 percent drop in sales year-on-year for the three months ending June and warned that the second half of the year will be worse than expected. Mr. Gelsinger added that the firm has not captured the benefit of trends like AI fully and called for “bolder actions” to take it forward.

The news shook the broad stock market, with even the other tech giants sliding and fueling a sharp drop in Asian stock markets. In Japan, the Nikkei share index closed 5.8% down, the biggest percentage fall since March 2020, when the pandemic began. Japanese tech firms were among the hardest hit.

The Nikkei index closed 2,216.63 points lower at 35,909.70. This is its second-biggest points fall ever. Concerns over the health of the US economy were another factor contributing to today’s sharp fall in share prices; these were fueled by a downbeat survey of US manufacturing firms. This has placed added interest in the latest US jobs figures, which are due this week and should give a clearer view of the health of the economy.

The three major share indexes closed lower on Thursday in the US, with shares in big names like Amazon continuing to fall in after-hours trading. Amazon’s stock dropped more than 4% following the report of a 10% rise in sales to $148 billion, marking a slowdown from the previous quarter. It also forecast further weakening in the coming months, putting pressure on its margins even as it ramps up investments in areas like artificial intelligence.

Intel’s CEO, Pat Gelsinger, explained that the company basically needs to change how it runs by cutting investment plans and suspending dividend payments. “Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI,” Gelsinger said in a staff memo. He expressed that the situation is one that calls for “bolder actions” and that they need to completely overhaul how the company is run.

The news has shocked many in the market, according to Lucy Coutts, an investment director at JM Finn. “It’s really having to pull back on spending on its data centers and it’s struggling to take market share from other providers,” she said. That means some tough decisions have been made if Intel is to be competitive.

In contrast, there was more positive news from Apple, as it experienced a rebound in sales during the spring, given tough times in China and another decline in iPhone sales. Apple revenues reached $85.8bn for the three months to June, up 5% year on year, returning growth following a slump at the start of 2024.

The company is brilliantly positioned to benefit from the surge in AI usage, according to Apple’s chief executive, Tim Cook. The firm has recently made available new features it has branded as “Apple Intelligence” to developers in the US. These make it easier for iPhone users to record and transcribe phone conversations, generate personalized emojis while messaging, and interact with the company’s voice assistant, Siri, in a more conversational tone.

“We remain very optimistic about AI’s potential and continue to invest heavily in it,” he said. Sales of iPhones fell by 1% between April and June but the drop was more than offset by an increase in Mac and iPad sales. Apple announced an all-time high for revenue from its services division, which incorporates Apple Pay, Apple News, and other products and services.

In essence, this is a pointer to the fact that Intel’s decision to cut over 15,000 jobs is such that it becomes a depiction of struggling to remain relevant and adapting to new trends such as Artificial Intelligence. As a corporation, it is taking very gigantic measures to solve these problems. However, the effect of the struggle by this giant is felt both in the technology and the global markets. Apple’s attention to artificial intelligence and strong performance in other product areas present a contrast to Intel’s current struggles.