Intel on Thursday revealed drastic plans to slash its employee headcount and capital spending in an attempt to put its business back on a stable financial footing, as it suffered the latest setback in its slow-moving turnaround plans.

The emergency cost-saving moves include a 15 per cent cut to its workforce, or about 15,000 jobs, with most of the positions set to go this year. To shore up its weakening finances, Intel also scrapped its dividend and announced a surprise reversal in its surging capital spending, with investment this year now likely to be 20 per cent less than forecast.

The US chipmaker’s shares plunged as much as 20 per cent on the news in after-market trading, topping the 10 per cent decline seen on its last earnings report and reflecting another big hit to Wall Street’s confidence that chief executive Pat Gelsinger will be able to pull off his ambitious turnaround plan.