Intel said on Thursday it would cut more than 15 percent of its workforce, some 17,500 people, and suspend its dividend starting in the fourth quarter as the chipmaker pursues a turnaround focused on its money-losing manufacturing business.

It also forecast third-quarter revenue below market estimates, grappling with a pullback in spending on traditional data center semiconductors and a focus on AI chips, where it lags rivals.

Shares of Santa Clara, California-based Intel slumped 20 percent in extended trade, setting the chipmaker up to lose more than $24 billion in market value. The stock had closed down 7 percent on Thursday, in tandem with a plunge in U.S. chip stocks after a conservative forecast from Arm Holdings on Wednesday.

The results did not rock the broader chip industry.

AI powerhouse Nvidia and smaller rival AMD ticked up after hours, underscoring how well-positioned they were to take advantage of the AI boom, and Intel's relative disadvantage.

"I need less people at headquarters, more people in the field, supporting customers," CEO Pat Gelsinger talked about the job cuts. On the dividend suspension, he said: "Our objective is to ... pay a competitive dividend over time, but right now, focusing on the balance sheet, deleveraging."

Intel, which employed 116,500 people as of June 29, excluding some subsidiaries, said the majority of the job cuts would be completed by the end of 2024. In April, it declared a quarterly dividend of 12.5 cents per share.

Intel is in the middle of a turnaround plan, focused on developing advanced AI processors and building-out its for-hire manufacturing capabilities, as it aims to recoup the technological edge it lost to Taiwan's TSMC, the world's largest contract chipmaker.

The push to energize that contracting foundry business under Gelsinger has increased Intel's costs and pressured profit margins. More recently, the chipmaker has said it will cut costs.