Intel said today it would cut more than 15% of its workforce and suspend its dividend starting in the fourth quarter as the chipmaker pursues a turnaround centered around its loss-making manufacturing business.

Shares of the Santa Clara, California-based company slumped 20% in extended trade, setting it up to lose more than $24 billion in stock market value.

The stock had closed down 7% today, in tandem with U.S. chip stocks plummeting after a conservative forecast from Arm Holdings on Wednesday.

A majority of the job cuts will be completed by the end of 2024, Intel said. The company’s headcount was 124,800 at the end of 2023.

“I need less people at headquarters, more people in the field, supporting customers,” CEO Pat Gelsinger said in an interview.

The company also set out plans to cut operating expenses and reduce capital expenditure of more than $10 billion in 2025.

Much of Wall Street’s focus has centered around the heavy investments and huge costs incurred by Intel as it builds out its manufacturing capacity in a bid to compete against Taiwan’s TSMC.

Intel’s lagging position in the market for AI chips has also sent its shares down more than 40% so far this year, as investors temper their expectations for the company’s growth in the booming market.

“A $10 billion cost reduction plan shows that management is willing to take strong and drastic measures to right the ship and fix problems. But we are all asking, ‘is it enough’ and is it a bit of a late reaction considering that CEO Gelsinger has been at the helm for over three years?” said Michael Schulman, chief investment officer of Running Point Capital.

As part of its cost reduction plan, Intel expects capital expenditures in 2024 to between $25 billion and $27 billion and is targeting gross capital expenditures between $20 billion and $23 billion for 2025.

Intel had recorded capital expenditures of $25.8 billion in 2023, compared to $24.8 billion in 2022. It was $18.7 billion in 2021 when Gelsinger took charge.

In February last year, the company had set out to provide annual cost savings between $8 billion and $10 billion by 2025.

“Our objective is to come back with the dividend, to pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging,” said Gelsinger.

“Deleveraging and capital investments are, we believe, a greater shareholder return right now than paying a dividend.”

In April, Intel declared a quarterly dividend of 12.5 cents per share.

Intel also forecast third-quarter revenue below estimates as it grapples with a pullback in spending on traditional data center chips and increased competition in the personal computer market.

The company expects revenue to be between $12.5 billion and $13.5 billion for the quarter, compared with analysts’ average estimate of $14.35 billion, according to LSEG data.