Intel slashes dividend by nearly two-thirds to shore up cash as chip giant braces for a tough year

In January, when Intel reported one of its worst financial quarters in years, the chip giant worked to keep up investor confidence by holding its dividend steady at $0.365/share. Less than a month later, it's singing a very different tune. The company today announced that it was revising its dividend to $0.125 per share, down nearly two-thirds, as part of a bigger effort to conserve cash amid the very tough economic environment, and how it's playing out specifically in the tech sector.

The dividend cut underscores the darker outlook Intel has for the year ahead. The company's dividend has been level at $0.36 for many quarters and has dipped below $0.30 since 2017, and while dividends do not impact non-investors -- they can be used to keep investors happy even through rockier patches, such as a bad stock decline or disappointing earnings, and also simply to keep the stock at a premium overall: Intel's paid out some $80 billion in dividends since 1992 -- they are also a bellwether of the company's bigger state.

Intel is explaining the cut in the context of bigger efforts at the company to cut up to $3 billion this year, and up to $10 billion per year by 2025 -- which it will be doing by phasing out certain operations, laying off employees, reducing compensation from executives and making other cuts. It's also taking a bigger bet on its own tech by building out its own internal foundry, which will take some investment (and comes with its own risk of course), alongside the always-clear-and-present threat of competition in the area of cutting-edge chip design. CEO Pat Gelsinger said the latter of these are still on track.