Intel is facing significant financial turmoil, with its stock price plummeting to its lowest level in 50 years, recently down 29%.

The company reported $7 billion in losses for 2023 and a 31% decrease in revenue compared to the previous year, prompting a cost-cutting strategy aimed at saving $10 billion by 2025.

As part of this strategy, Intel plans to lay off over 15,000 employees, which represents more than 15% of its workforce.

CEO Pat Gelsinger attributed these layoffs to disappointing revenue growth and challenges in leveraging AI trends, with most cuts expected by the end of 2024.

In its latest earnings report, Intel guided Q3 revenue between $12.5 billion and $13.5 billion, significantly below the $14 billion estimate.

The company is losing market share in both the PC and server markets, particularly to competitors like AMD and Nvidia, as demand for graphics processors driven by AI workloads rises.

Despite efforts to ramp up AI chip production, Intel faces long-term challenges due to its manufacturing technologies, while competitors leverage advanced production processes.

To bolster its presence in the AI sector, Intel is introducing a new AI chip for PCs, code-named Lunar Lake, expected to ship in the third quarter.

Intel is also attempting to compete in the AI market with its Gaudi 2 and 3 accelerators, but expects to generate only $500 million in sales from these chips this year, a stark contrast to Nvidia's $20 billion quarterly sales.

Gelsinger, who took over in 2021, is grappling with a decade of operational issues and fierce competition from Nvidia in AI technology.

Analysts have drawn comparisons between Intel's struggles and those of Boeing, highlighting a history of poor management decisions, including significant spending on share buybacks instead of reinvesting in the company.