Intel's Strategic Overhaul: Job Cuts, European Retreat, and AI Pivot Amid Ongoing Struggles

Intel dumps European sites, signals more job cuts to come

CEO Lip-Bu Tan says strategy shift will focus on customer needs, efficiency, and cutting costs Ailing chip giant Intel is ditching its manufacturing sites in Germany and Poland and signaling further job cuts ahead as its new leader tries to stem the losses and turn the Silicon Valley pioneer's fortunes around. In a memo to all employees, chief executive Lip-Bu Tan said he was choosing a different approach to building up the firm's foundry business that would be "aligned with the needs of customers" as well as judicious and disciplined. "With that in mind, we have decided not to move forward with previously planned projects in Germany and Poland," he said. This means that the much-vaunted megafab near Magdeburg in eastern Germany, first announced in 2022, will not be built. Intel was planning to invest more than €30 billion (about $35 billion) in the chip factory, but it ran into delays and former chief Pat Gelsinger put it on hold last year. Its cancellation means that Intel stands to lose out on the €10 billion ($11.7 billion) in subsidies it was set to receive from the German government as EU Chips Act funding for the site. Similarly, it will no longer receive the $1.9 billion approved by the European Commission as a state aid package towards the $4.6 billion it previously planned to spend on building an assembly and testing facility outside Wroclaw, Poland. Tan said that Intel remains "deeply committed" to investing in the US, but will also be further slowing construction of its fabrication plant in Ohio to "ensure our spending is aligned with demand." Completion of the site has been pushed back several times already, the last being earlier this year when the chipmaker said it would not now happen before 2030. The bad news keeps coming for Intel staff, as Tan confirmed plans to lay off approximately 15 percent of the workforce, but said Chipzookie still aims to end the year with a global headcount of about 75,000. If that comes to pass, it will mean that the company will have shed about a quarter of its workers within a year. "We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company. These actions are critical to strengthening our competitive position going forward," he said, while adding that "it means we are saying goodbye to valued colleagues." Intel's chief also hinted at a new AI strategy, saying the chipmaker had previously approached AI with a traditional, silicon and training-centric mindset, and that this needed to change. "We will focus our AI efforts on developing a cohesive silicon, system and software stack strategy," he stated, claiming Intel has already started "incubating new capabilities" and attracting new talent. Tan's memo coincided with the release of Intel's Q2 2025 financial results for the three months ended June 28, which showed revenue was essentially flat compared with a year ago, at $12.9 billion. Net losses widened to $2.9 billion from $1.6 billion for the same period of 2024. The revenue figure was higher than analysts expected, according to Marketwatch, which said that the company's stock slid by 4.6 percent in extended trading as investors are concerned over growing restructuring charges that are hitting profits. Intel's Data Center and AI (DCAI) business unit saw its revenue rise by 4 percent to $3.9 billion, while the Client Computing Group (CCG) was down by 3 percent to $7.9 billion. The troublesome Foundry division actually saw its revenue rise by 3 percent compared with a year ago to $4.4 billion, according to Intel. Intel's guidance for the third quarter of 2025 is for revenue of between $12.6 and 13.6 billion. In a glimmer of good news for the chipmaker, a federal judge this week granted Intel a motion to dismiss a lawsuit against the company by investors who had alleged it misrepresented the performance of its Foundry business. The judge ruled that the plaintiffs in the twice-amended complaint had failed to demonstrate any of Intel's statements were misleading. ®

Intel's Steady Decline Continues With 15% Cut to Staff and Scrapped Factory Plans

Intel CEO Lip-Bu Tan told employees in a staff-wide memo yesterday that the company plans to cut its workforce by roughly 15%â€"more than 25,000 jobsâ€"aiming to end the year with about 75,000 employees worldwide. The cuts are part of the struggling chipmaker’s efforts to turn things around and compete in the booming AI market. Intel isn’t alone among Silicon Valley giants making job cuts as AI becomes a bigger priority. Meta announced it was cutting about 5% of its staff in January. Google is offering buyouts. And even Microsoft CEO Satya Nadella addressed in a company-wide memo what he called the “enigma of success†noting how the company is thriving financially with record profits, yet just laid off 9,000 workers earlier this month But unlike those companies, Intel isn’t thriving. The once-dominant chipmaker has stumbled in recent years, missing the smartphone boom and arriving late to the AI race. On Wednesday, it reported its sixth straight quarterly loss. “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 the memo. In addition to the layoffs, Intel is scrapping plans for new factories in Germany and Poland. Tan also said the company would slow construction of a major chip plant in Ohio “to ensure that spending is aligned with demand.†The Wall Street Journal reported that the facility was originally expected to be completed by the end of this year, but now likely won’t be finished until after 2030. At the same time, Intel is going all in on its latest chipmaking technology, Intel 18A. The process is designed to produce advanced chips like Panther Lake, Intel’s next-generation microprocessor, expected to launch later this year. Looking further ahead, Tan said Intel will develop its next major process node, Intel 14A, from the ground up in close collaboration with external customers. The idea is to only work on projects that have obvious demand. “There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution,†he wrote. As far as its AI ambitions, Intel plans to develop a cohesive stack strategyâ€"not just chips, but also the software and systems to support them. The focus will be on areas where Intel believes it can stand out from more established competitors. One of those is inference, where AI models apply what they’ve learned to make real-time decisions or predictions. Another is agentic AI, where systems are designed to operate independently and take actions on their own. “Our starting point will be emerging AI workloads â€" then we will work backward to design software, systems and silicon that enable the best customer outcomes," Tan wrote. Whether Intel can pull off this turnaround or if it’s just too late remains to be seen.

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. 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 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. Tan said Intel 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." For the second quarter, Intel reported a loss of $2.9 billion, or 67 cents per share, down from a loss of $1.6 billion, 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 $12.9 billion. Analysts, on average, were expecting adjusted earnings of 1 cent per share on revenue of $12 billion, according to a poll by FactSet.

Intel plans to slash 25,000 jobs in 2025 as new CEO warns 'there are no more blank checks'

"There are no more blank checks," Tan wrote in a memo to employees published by Reuters. "Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution." The memo directly addresses: "We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company," Tan, who took over as CEO in March, wrote. Intel's stock jumped early in 2025 as optimism built around new leadership, but shares fell over 9% after Thursday's Q2 earnings and layoff announcement, threatening to erase most yearly gains. Intel has lost ground to Nvidia in the AI sector and to AMD in traditional computing market. Unlike other Silicon Valley giants, it doesn't have booming AI or cloud businesses to offset its losses. Microsoft, IBM, and Google have also shed thousands of workers this year. CEOs, including Meta's Mark Zuckerberg and Microsoft's Satya Nadella, have said they are cutting staff to streamline operations and free up capital to invest billions in AI.

US chip maker Intel says revenue rose as it cut ranks

San Francisco (United States) (AFP) - Intel on Thursday posted quarterly revenue that topped market expectations, saying it has cut about 15 percent of its workforce to be "more agile." The US chip maker also said it "will no longer move forward" with projects in Germany and Poland as part of a push to save billions of dollars. The struggling chip maker's earnings report came as rivals specializing in graphics processing units (GPUs) for artificial intelligence thrive due to rapid adoption of the technology. Intel is one of Silicon Valley's most iconic companies, but its fortunes have been dwarfed by Asian powerhouses TSMC and Samsung, which dominate the made-to-order semiconductor business. The company was also caught by surprise with the emergence of Nvidia as the world's preeminent AI chip provider. Intel's niche has been in chips used in traditional computing processes, steadily being eclipsed by the AI revolution. Intel reported $12.9 billion in sales in the recently ended quarter, topping forecasts, but logged a $2.9 billion loss that included $1.9 billion in restructuring charges. "Intel has completed the majority of the planned headcount actions it announced last quarter to reduce its core workforce by approximately 15 percent," the company said in an earnings release. "These changes are designed to create a faster-moving, flatter and more agile organization." Intel shares were down slightly in after-hours trades that followed the release of the earnings figures. Intel chief executive Lip-Bu Tan took the helm in March, announcing layoffs as White House tariffs and export restrictions muddied the market. Malaysia-born tech industry veteran Tan has said it "won't be easy" to overcome challenges faced by the company. Demand and Turmoil Meanwhile, South Korean chip giant SK hynix reported record quarterly profits Thursday thanks to soaring demand for artificial intelligence technology. The world's second-largest memory chip maker dominates the market for high-bandwidth memory semiconductors and is a key supplier for US titan Nvidia. Riding the AI wave, last week Taiwan chip giant TSMC announced a surge in net profit for the second quarter. "Nvidia suppliers like SK hynix will continue to enjoy strong demand in the coming months and years for memory chips due to the high memory content needed to make AI chips functional," G. Dan Hutcheson of TechInsights told AFP. Dutch tech giant ASML last week said it booked higher net profits in the second quarter of 2025 compared with the same period last year. The firm, which makes cutting-edge machines for the manufacture of semiconductors, warned that the growth outlook for next year was somewhat less rosy than before. "Looking at 2026, we see that our AI customers' fundamentals remain strong," said Chief Executive Officer Christophe Fouquet in a statement. "At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments," he cautioned. Washington has sought to curb exports of state-of-the-art chips to China, concerned that they could be used to advance Beijing's military systems and otherwise undermine American dominance in AI.

Intel Is Laying Off 33,000 Employees in Turnaround Plan: 'Scale Back the Company'

Intel reported a loss of $2.9 billion for the second quarter, up from a $1.6 billion loss a year prior. At the end of 2024, Intel had 108,900 employees. Now the chipmaking giant is planning to cut over 33,000 jobs to cut the workforce to 75,000 employees by the end of the year. Intel CEO Lip-Bu Tan, 65, said in a memo to staff on Thursday that Intel is implementing a plan to reduce its workforce by 15%. The layoffs are in addition to the approximately 21,000 roles (about 20% of Intel's workforce) the company let go from April to June, which mainly focused on cutting down layers of middle management. Intel previously announced in August that it was laying off 15% of its workforce, or over 15,000 employees, last year. Related: Intel Requires Employees to Work From the Office More Often: 'This Action Is Necessary' In its second-quarter earnings report released on Thursday, Intel reported a sixth consecutive quarterly loss of $2.9 billion, nearly double its $1.6 billion loss at the same time a year earlier. The increased loss was mainly due to restructuring costs of $1.9 billion due to job cuts. Tan stated in a conference call with analysts and investors following the report that over the past three months, he had completed "a systematic review" of Intel's headcount and spending. "Our goal is to reduce inefficiencies and redundancies and increase accountability at every level of the company," Tan stated on the call. "We need to right-size and scale back the company." Tan, who was previously CEO of chip software company Cadence Design Systems from 2009 to 2021, is now tasked with turning Intel around after three years of declining revenue. He became Intel's CEO on March 18, replacing former CEO Pat Gelsinger. Intel faces competition from rival companies like Nvidia, which captured a greater share of the AI chip market. Nvidia had between 70% and 95% of the market share for AI chips last year, compared to Intel's less than 1%, per CNBC. Related: How Nvidia CEO Jensen Huang Transformed a Graphics Card Company Into an AI Giant: 'One of the Most Remarkable Business Pivots in History' However, Intel is trying to catch up. The company plans to launch more efficient chips later this year to better compete with Nvidia and other rivals, per The Wall Street Journal. Intel stock was down over 7% this past month, but up nearly 2% year-to-date.

Intel pulls plug on Europe fab plans, trims workforce to 75K, posts 2.9B loss but still beats Wall Street expectations

Intel has reported its second-quarter financial results for 2025, revealing a period of dramatic internal change, flat topline growth, and persistent bottom-line pressure as it navigates both cyclical headwinds and its multiyear transformation into an AI and foundry-first company. The company posted USD 12.9 billion in revenue for the quarter, unchanged from the same period last year. But it was the profitability metrics that grabbed attention: a net loss of USD 2.9 billion and a GAAP loss per share of USD (0.67), weighed down heavily by nearly USD 2.9 billion in restructuring, impairment, and one-off charges. Intel's ongoing strategic overhaul, now well into its second year, showed up most visibly in its GAAP figures. The company took a USD 1.9 billion hit in restructuring costs alone, part of a broader initiative to streamline its global footprint and reallocate resources toward higher-margin and AI-driven opportunities. A further USD 800 million in impairment and accelerated depreciation charges, along with USD 200 million in one-time expenses, pushed GAAP gross margins down to 27.5% (a year-over-year drop of nearly 8 percentage points). Non-GAAP gross margins also fell to 29.7%, underlining the difficulty of maintaining profitability while shifting operational gears. Perhaps the most striking operational change is the headcount reduction. Intel confirmed it has completed most of its planned workforce cuts, reducing its core team by roughly 15%. This brings the total projected employee count to about 75,000 by year-end. The goal, according to Intel, is to improve efficiency and focus on high-growth segments. These reductions come in tandem with site consolidations and facility rollbacks. Intel announced the cancellation of some planned fab projects in Germany and Poland, along with the consolidation of assembly and test operations from Costa Rica to Vietnam and Malaysia. Meanwhile, construction at the company's new fab site in Ohio has been deliberately slowed to better match evolving demand forecasts. Looking closer at Intel's business units, the performance was uneven. The Client Computing Group (CCG), which includes consumer and enterprise PC chips, generated USD 7.9 billion in revenue which is down 3% year-over-year, a modest dip considering continued weakness in the global PC market. On the other hand, the Data Center and AI (DCAI) group saw a 4% bump in revenue to USD 3.9 billion, reflecting growing traction in AI workloads. Intel Foundry Services, a cornerstone of Intel's IDM 2.0 strategy, delivered USD 4.4 billion in revenue, a 3% increase year-over-year, as the company continues to position itself as a key rival to TSMC and Samsung in advanced node manufacturing. In total, Intel Products revenue was USD 11.8 billion, just 1% lower than the same quarter last year. Intel's cost management approach continues to be assertive. The company is targeting non-GAAP operating expenses of USD 17 billion for the full year, with capital expenditure guidance holding at USD 18 billion. Both figures highlight Intel's balancing act: investing in future nodes, fabs, and products while keeping current expenses in check. Looking ahead, Q3 2025 revenue is projected to fall between USD 12.6 billion and USD 13.6 billion. Profitability, however, is expected to remain muted. Intel forecasts a Q3 GAAP loss per share of USD (0.24), with non-GAAP EPS expected to just break even. Despite the financial strain, Intel's product roadmap remains ambitious. The company launched three new Xeon 6 processors during the quarter, including the Xeon 6776P, which will power some of NVIDIA's latest AI platforms. This is a noteworthy partnership, indicating growing synergy between Intel's data centre silicon and leading AI accelerators. Intel also reiterated that its next-generation Panther Lake processors are on track to ship in late 2025. These will be based on the 18A process node, for which production wafers have already started rolling out of its Arizona facilities, a key milestone for Intel's internal foundry model. As part of its ongoing asset monetisation efforts, Intel sold 57.5 million shares of Mobileye, raising USD 922 million. It still retains majority control of the company. Q2 2025 marked a pivotal moment in Intel's transformation story. While headline revenue remains stagnant and losses persist, the underlying shifts including headcount reductions, site consolidations, and forward-looking silicon launches does suggest a company intent on reshaping itself for the next decade. The AI opportunity is clearly in Intel's sights, even if the path there is proving financially painful. Whether these moves will restore long-term profitability and competitive momentum remains to be seen, but the company's bets are firmly placed. Intel, once the undisputed king of silicon, is now in the midst of its most consequential reinvention to date.