A new lawsuit from investors comes after layoffs and problems with Intel’s processors.
Ever since Pat Gelsinger took over at Intel in 2021, he has been pushing the idea of a comeback. Once the most valuable chip company in the US, Intel was surpassed by other chip companies, including Nvidia, TSMC, AMD, and more, due to a number of missteps.
However, Intel’s recent problems suggest it’s going in the opposite direction of its intended recovery, as it faces difficulties across several areas.
On Thursday, Intel’s shareholders sued the company, arguing that it provided false or misleading statements regarding its foundry business, which makes chips on contract for outsiders. According to shareholders, misleading information led to Intel’s stock price inflation from January 25th to August 1st.
The proposed class action was filed against Intel, Gelsinger, and Chief Financial Officer David Zinsner in San Francisco federal court, Reuters reported.
The lawsuit came after the company announced a $1.6 billion loss and a $10 billion savings plan to recover it. This plan will result in stopping non-essential work and laying off 15% of Intel’s employees, which could amount to 15.000-19.000 of the company’s total workforce.
In addition, issues with Intel’s hardware may lead to another lawsuit against it.
Intel’s Raptor Lake and Raptor Lake Refresh desktop processors have significant instability issues, which, according to Intel, stem from a microcode algorithm that resulted in incorrect voltage requests to the processor.
The company is releasing an update for users with affected CPUs in mid-August, but insider information shows that the CPUs appear to be unfixable.
Intel earlier said it’s not planning to recall affected CPUs, though it announced that it will extend the warranty for affected CPU line for two more years.
Following the news about Intel’s CPU instability issues, a law firm started investigating another class action lawsuit.
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