Intel Announces Massive Layoffs and Strategic Shifts Amid Struggles in AI Chip Market

Intel to cut 15% of workers as chipmaker grapples with manufacturing challenges

July 24 (Reuters) - Intel said on Thursday it is laying off 15% of its workforce and new CEO Lip Bu Tan presented a blueprint for a more cost-disciplined, streamlined chipmaker that would issue "no more blank checks." The plans are part of the effort by Tan, who took the helm in March, to turn around the storied U.S. chipmaker. Intel has divested businesses, laid off employees and redirected resources. The company has underperformed due to years of strategic missteps. Intel has virtually no foothold in the booming AI chip industry that is dominated by Nvidia (NVDA.O), opens new tab and its longtime rival AMD (AMD.O), opens new tab has been gaining share in Intel's mainstay personal computer and server semiconductor markets. As part of the cuts, Intel attempted to take a "surgical" approach and remove layers of middle management, finance chief David Zinsner told Reuters on Thursday. "We took out about 50% of the layers of the company," Zinsner said. The company is cutting its workforce by 15% from 96,400 that it reported at the end of June, and plans to further reduce the company's headcount to 75,000 by the end of the year. The remainder of the cuts to bring the headcount to 75,000, down 22% from the end of 2024, will be through attrition and "other means," according to the company. Intel's shares were down 1.9% in choppy extended trading. In a memo to employees, Tan said Intel is changing its strategy for building manufacturing capacity and now plans to build factories only when the demand for its chips is there. Previously, the company had built factories ahead of demand. "There are no more blank checks," Tan wrote in the memo. "Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution." Intel is now working to bring its so-called 18A manufacturing process, which has few external customers, to high volume. In the memo, Tan said the company plans to take a disciplined approach to investments in the next-generation 14A manufacturing process. In its securities filings, Intel said that if it fails to find a significant external customer for 14A, it may be forced to exit the chip manufacturing business. The company said it is retaining the option to make all products that need performance beyond its 18A generation at external foundries. Prior to Tan's tenure, Intel had committed to tens of billions of dollars of new factory construction in the U.S. and elsewhere. On Thursday, Tan wrote the company now plans to slow construction work on new factories in Ohio and halt planned factories in Poland and Germany. Tan also said the company would consolidate chip packaging operations in Costa Rica with its other packaging operations in Vietnam and Malaysia, breaking with a longtime Intel practice of maintaining operations in separate global regions for supply-chain resiliency. On a conference call with analysts, Tan's tone suggested he has taken charge of the company and was trying to wrest it back from what he viewed as previous missteps. "I do not subscribe to the belief that if you build it, they will come," he said on the call. He later added that he will personally review and approve each of Intel's major chip designs. Tan also said on the call he believes that Intel's 18A technology could generate a reasonable return on investments even if it is used only for Intel's own products. Reuters reported earlier this month that Tan is debating whether to quit offering that technology to external customers. STEEP LOSSES The Santa Clara, California-based chipmaker disclosed the layoff goals as it forecast steeper third-quarter losses than Wall Street estimates on Thursday, despite anticipating higher sales than analysts expected. The company said it expects a third-quarter loss of 24 cents per share, steeper than estimates of losses of 18 cents per share, according to data from LSEG. Intel expects revenue of $12.6 billion to $13.6 billion for the September quarter, with a midpoint of $13.1 billion that was higher than analysts' average estimate of $12.65 billion, according to data compiled by LSEG. Growth in the PC market is uncertain after customers pulled shipments forward to the first half of the year amid ongoing trade negotiations, analysts have said. Shipments of PCs rose 6.5% in the June quarter according to data from International Data Corporation. While semiconductors are currently exempt from U.S. President Donald Trump's sweeping global tariffs, Intel and its fellow chipmakers are facing customers who are reluctant about spending commitments amid widespread macroeconomic uncertainty. Intel's second-quarter revenue for the period ended June 28 was flat at $12.9 billion, snapping a four-quarter streak of sales declines. The result beat estimates of $11.92 billion, according to LSEG data. In April, Intel agreed to sell a 51% stake in its Altera programmable chip business for $4.46 billion. Intel said job cuts contributed to restructuring costs of $1.9 billion in the second quarter. It recorded June quarter adjusted losses of 10 cents per share, compared with estimates of a profit of 1 cent per share. Its unadjusted loss was 67 cents per share in the second quarter, steeper than analyst estimates of a 26-cent-per-share loss. Reporting by Arsheeya Bajwa in Bengaluru; Max A. Cherney and Stephen Nellis in San Francisco Editing by Sayantani Ghosh and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Business Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Intel cuts back spending, workforce as struggling chip maker mounts comeback

Intel Corp. is shedding thousands of workers and cutting expenses as its new CEO works to revive the fortunes of the struggling chipmaker that helped launch Silicon Valley but has fallen behind rivals like Nvidia Corp. In a memo to employees, CEO Lip-Bu Tan said Intel plans to end the year with 75,000 workers, down 31% from 108,900 employees at the end of last year, through layoffs and attrition. The company previously announced a 15% workforce reduction. "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company," Tan wrote. In addition, Intel will scrap previously planned projects in Germany and Poland and also move assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia. Costa Rica will remain a "home to key engineering teams and corporate functions," Tan said in the memo. In the U.S., the company said it will "further" slow construction of a semiconductor plant in Ohio. Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobile computing triggered by Apple's 2007 release of the iPhone, and it's lagged more nimble chipmakers. Intel's troubles have been magnified since the advent of artificial intelligence -- a booming field where the chips made by once-smaller rival Nvidia have become tech's hottest commodity. The Santa Clara, California-based company's market cap was $98.71 billion as of the market close on Thursday, compared with Nvidia's $4.24 trillion.

Losses and job cuts as Intel as chipmaker drops projects in Europe

Continued lay-offs and further spending cuts are part of the turnaround plan of the US-based chipmaker to save the company's future, as it has just reported further losses for the second quarter of the year. Intel Corp. is shedding thousands of workers and cutting expenses as its new CEO works to revive the fortunes of the struggling chipmaker that helped launch Silicon Valley but has fallen behind rivals like Nvidia Corp. and Advanced Micro Devices Inc. In a memo to employees Thursday, CEO Lip-Bu Tan said Intel plans to end the year with 75,000 "core" workers, excluding subsidiaries, through layoffs and attrition. That's down from 99,500 core employees at the end of last year. The company previously announced a 15% workforce reduction. "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organisation, drive greater efficiency and increase accountability at every level of the company," Tan wrote. In addition, Intel will scrap previously planned projects in Germany and Poland and also move assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia. Costa Rica will remain a "home to key engineering teams and corporate functions," Tan said in the memo. In the US, the company said it will "further" slow construction of a semiconductor plant in Ohio. Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobile computing triggered by Apple's 2007 release of the iPhone. Intel's troubles have been magnified since the advent of artificial intelligence -- a booming field where the chips made by once-smaller rival Nvidia have become tech's hottest commodity. The Santa Clara, California-based company's market cap was $98.71 billion (€84bn) as of the market close on Thursday, compared with Nvidia's $4.24 trillion (€3.61tr). Tan said Intel is focusing on its "core product portfolio" and artificial intelligence offerings to serve customers better. "There are no more blank checks," Tan wrote. "Every investment must make economic sense." For the second quarter, Intel reported a loss of $2.9bn (€2.47bn), or 67 cents per share, down from a loss of $1.6bn (€1.36bn), or 38 cents per share, a year earlier. Excluding one-time items, the company posted a loss of 10 cents a share. Revenue was flat at $12.9bn (€10.1bn). Analysts, on average, were expecting adjusted earnings of 1 cent per share on revenue of $12bn (€10.2bn), according to a poll by FactSet.

Intel cuts back spending, workforce as struggling chip maker mounts comeback

Intel Corp. is shedding thousands of workers and cutting expenses as its new CEO works to revive the fortunes of the struggling chipmaker that helped launch Silicon Valley but has fallen behind rivals like Nvidia Corp. In a memo to employees, CEO Lip-Bu Tan said Intel plans to end the year with 75,000 workers, down 31% from 108,900 employees at the end of last year, through layoffs and attrition. The company previously announced a 15% workforce reduction. "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company," Tan wrote. In addition, Intel will scrap previously planned projects in Germany and Poland and also move assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia. Costa Rica will remain a "home to key engineering teams and corporate functions," Tan said in the memo. In the U.S., the company said it will "further" slow construction of a semiconductor plant in Ohio. Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobile computing triggered by Apple's 2007 release of the iPhone, and it's lagged more nimble chipmakers. Intel's troubles have been magnified since the advent of artificial intelligence -- a booming field where the chips made by once-smaller rival Nvidia have become tech's hottest commodity. The Santa Clara, California-based company's market cap was $98.71 billion as of the market close on Thursday, compared with Nvidia's $4.24 trillion.

Intel to slice and dice a huge 30% of its global workforce: over 15,000 jobs to be slashed

TL;DR: Intel plans to reduce its global workforce from 108,900 to 75,000 by the end of 2025, cutting over 15,000 jobs to improve efficiency and focus on core products and AI development. CEO Lip-Bu Tan emphasizes financial discipline and talent retention amid challenging market conditions. Intel is planning more layoffs that will reduce its global workforce down from 90,000 to 75,000 in a new move from CEO Lip-Bu Tan. Intel had 108,900 employees as of December 2024, with plans to end 2025 with around 75,000 employees through layoffs and attrition, which results in a 24.6% decrease in its staffers after plans of 15,000+ new job cuts in the coming weeks and months. Intel CEO Lip-Bu Tan said in a statement: "Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency. We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers. We are also taking the actions needed to build a more financially disciplined foundry. It's going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value". In its Q2 2025 earnings, Intel reported revenues of $12.9 billion which is a little better than its previous quarter, and on the high-end of Intel's forecast for the three-month period. Intel expected Q2 2025 revenues of $11.2 billion to $12.4 billion, with Intel CFO David Zinsner calling a "wider-than-normal" range that was the result of "very fluid trade policies" by the US and other countries. During the Q2 2025 earnings call, Intel CEO Lip-Bu Tan said: "We need to right-size and scale back the company while ensuring that we are retaining our best internal talents and hiring the best external talents from industry and universities. These were hard but necessary decisions, and we reduced management layers by approximately 50 percent in the process".

Intel Cuts Back Spending, Workforce as Struggling Chip Maker Mounts Comeback

Intel Corp. is shedding thousands of workers and cutting expenses as its new CEO works to revive the fortunes of the struggling chipmaker that helped launch Silicon Valley but has fallen behind rivals like Nvidia Corp. In a memo to employees, CEO Lip-Bu Tan said Intel plans to end the year with 75,000 workers, down 31% from 108,900 employees at the end of last year, through layoffs and attrition. The company previously announced a 15% workforce reduction. "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company," Tan wrote. In addition, Intel will scrap previously planned projects in Germany and Poland and also move assembly and test operations in Costa Rica to larger sites in Vietnam and Malaysia. Costa Rica will remain a "home to key engineering teams and corporate functions," Tan said in the memo. In the U.S., the company said it will "further" slow construction of a semiconductor plant in Ohio. Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobile computing triggered by Apple's 2007 release of the iPhone, and it's lagged more nimble chipmakers. Intel's troubles have been magnified since the advent of artificial intelligence -- a booming field where the chips made by once-smaller rival Nvidia have become tech's hottest commodity. The Santa Clara, California-based company's market cap was $98.71 billion as of the market close on Thursday, compared with Nvidia's $4.24 trillion.

Intel Plans to Lay Off Up to a Whopping 30% of Its Workforce, Cutting Over 15,000 Jobs as CEO Lip-Bu Tan Declares That There Won't Be Anymore "Blank Checks"

Intel is aggressively cutting its workforce, planning to shrink it by more than one-third to combat operating losses and achieve financial stability. Team Blue's CEO, Lip-Bu Tan, was expected to come up with strategies that would be aggressive, but necessary to steer Intel towards an economic rebound, and one of the core strategies adopted by Tan is widespread layoffs. Intel has been reporting a process of layoffs for several weeks now; however, in the recent Q2 earnings, the firm revealed that it plans to have a headcount of 75,000 employees, which marks a reduction of more than 30% of its workforce from a year ago (via CRN). Historically, this marks one of the biggest layoff rounds by the company. We are currently unaware of where the next major layoffs would occur, but based on our estimates, the more affected areas would be Intel's investments that haven't managed to reach expectations, and this includes regions like Germany, Poland, and Costa Rica, where the layoff percentages would be relatively higher. Wall Street has demanded that Intel show them the path to profitability, and layoffs are one way to reduce a chunk of operating losses, and this is what CEO Tan is currently targeting. Intel's CEO has been making efforts to flatten the organization by merging roles and creating newer divisions that cater to consumer demand. The priority here is to achieve financial efficiency, hence Intel won't pursue any project that doesn't show convincing financial prospects, which is why Intel Foundry and its chip roadmap will take a massive hit, one that would likely surprise many of the company's fans out there. We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers. We are also taking the actions needed to build a more financially disciplined foundry. It's going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value. The situation at Intel is dire, indeed. The company is in the pursuit of a financial rebound, which, from the looks of it, will take several months, if not years. One thing that is certain is that CEO Tan does seem geared up to take difficult steps, and more importantly respect shareholder value, something which the markets do see with a lot of optimism.

Intel CEO Says He's 'Making Hard But Necessary Decisions' As Chipmaker Announces Massive Layoffs, Project Cancellations - NVIDIA (NASDAQ:NVDA), Intel (NASDAQ:INTC)

Intel Corporation INTC is undertaking sweeping layoffs and global project cuts as part of a major overhaul aimed at restoring its competitive edge in the AI-dominated semiconductor landscape. What Happened: On Thursday, after posting its second-quarter earnings, Intel CEO Lip-Bu Tan shared a memo with employees saying that the company will reduce its workforce to 75,000 employees by the end of the year through layoffs and attrition. According to an Associated Press report, this figure represents a 31% drop from the 108,900 employees Intel reported at the end of last year. "I know the past few months have not been easy," Tan wrote. "We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company." See Also: American Airlines CFO Declares Worst Is Over, But Cautious Outlook Sinks Stock Earlier, Intel announced that it is reducing 15% to 20% of jobs within its Foundry division. Alongside the layoffs, Intel is scrapping expansion plans in Germany and Poland and relocating some assembly and testing operations from Costa Rica to Vietnam and Malaysia. The Costa Rica site will continue to host key engineering and corporate teams. In the U.S., construction of a much-anticipated semiconductor facility in Ohio will be "further" delayed, Tan said in the memo. Why It's Important: Intel posted second-quarter revenue of $12.86 billion, surpassing the $11.91 billion expected by analysts. However, the company recorded an adjusted loss of 10 cents per share for the quarter, falling short of projections that had forecast a modest profit of one cent per share. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started The company has been struggling to keep pace with the rapid evolution of computing. It missed the mobile revolution and now trails competitors like Nvidia Corporation NVDA, whose chips dominate the surging AI market. As of Thursday's market close, Intel's market capitalization stood at $98.71 billion -- starkly overshadowed by Nvidia's $4.24 trillion valuation. Price Action: On Thursday, Intel shares fell 3.66% during the regular trading session and declined an additional 4.64% in after-hours trading, according to Benzinga Pro. Benzinga's Edge Stock Rankings indicate that INTC maintains solid momentum across short, medium and long-term periods. However, while the stock scores well on value, its growth rating remains relatively weak. Additional performance details are available here. Read Next: Cathie Wood Dumps Palantir As Stock Touches Peak Prices, Bails On Soaring Flying-Taxi Maker Archer Aviation Photo: Tada Images/ Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. INTCIntel Corp$21.58-8.13%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum25.94Growth19.21QualityN/AValue74.37Price TrendShortMediumLongOverviewNVDANVIDIA Corp$173.571.63%Market News and Data brought to you by Benzinga APIs

Intel cuts back spending, workforce as struggling chip maker mounts comeback

is shedding thousands of workers and cutting expenses as its new CEO works to revive the fortunes of the struggling chipmaker that helped launch but has fallen behind rivals like and In a memo to employees Thursday, CEO said plans to end the year with 75,000 "core" workers excluding subsidiaries, through layoffs and attrition. That's down from 99,500 core employees at the end of last year. The company previously announced a 15% workforce reduction. "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company," Tan wrote. Founded in 1968 at the start of the PC revolution, missed the technological shift to mobile computing triggered by Apple's 2007 release of the iPhone, and it's lagged more nimble chipmakers. Intel's troubles have been magnified since the advent of artificial intelligence -- a booming field where the chips made by once-smaller rival have become tech's hottest commodity. The -based company's market cap was as of the market close on Thursday, compared with 's . Tan said is focusing on its "core product portfolio" and artificial intelligence offerings to better serve customers. "There are no more blank checks," Tan wrote. "Every investment must make economic sense." Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission. , source