Key things
- Intel (INTC) announced on February 22, 2023 that it cut its quarterly dividend by two-thirds.
- The semiconductor maker believes the move will improve its financial flexibility.
- Other recent cost-cutting moves by the company include layoffs, reduced employee compensation and reduced operating costs.
Intel (INTC) shortened his dividend as part of the chip company’s latest effort to cut costs as demand for its products falls following the pandemic boom.
Intel announced it had cut its quarterly dividend by two-thirds, from 36.5 cents to 12.5 cents. It said the decision “reflects the board’s deliberate approach to capital allocation and is designed to best create long-term value for the company.”
Intel said the move will improve financial flexibility, which will “support the critical investments needed to execute Intel’s transformation during this period of economic uncertainty.” CEO Pat Gelsinger added that prudent capital allocation is important “as we rebuild our execution engine.”
Cost reduction
The company noted that it has recently taken several steps to improve its financial position, including creating $3 billion in savings in 2023 through layoffs, reducing employee compensation and reducing operating costs.
In the statement, Intel also reaffirmed the current outlook for the quarter that it stated when it released its fourth-quarter results last month.
Intel shares fell 2% on February 22, and have fallen 43% over the past year.
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