Intel is preparing to lay off nearly a quarter of its workforce, around 24,000 employees, by the end of 2025. It is one of the most significant restructurings in the company’s 56-year history. The chip giant, which had 99,500 workers at the end of 2024, will reduce its workforce to 75,000 employees worldwide. This shocking news grabbed headlines immediately after CEO Lip-Bu Tan released a memo to the staff.
The aggressive restructuring involves a complete scrapping of two significant expansion projects in Europe. This includes a delayed $16 billion ‘mega-fab’ project in Germany as well as an oversized assembly and testing facility in Poland. Intel is also scaling down in Costa Rica, shifting more than 2,000 jobs to Vietnam and Malaysia.
Tan, who became CEO in March, stated the Intel layoffs were “tough but essential”. Despite exceeding analysts’ expectations, the computing giant has reported losses for the sixth consecutive quarter, totaling $2.9 billion on $12.9 billion in sales in the last quarter.
“There are no blank checks anymore,” Lip-Bu Tan informed employees, adding, “Every investment has to be economically justified.”
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Intel’s gigantic $28 billion Ohio plant, once a symbol of US chip production, is also slowing down, with completion now expected only after 2030. CFO David Zinsner added that the construction pace would be in line with the market demand, against the backdrop of increasing cost pressures.
The Intel job cuts aim to reduce the tech giant’s management layers by half. This is a bid to contain remote work and enforce a return-to-office policy from September. The company already started cutting its rolls in Q2, posting $1.9 billion in restructuring expenses.
Simultaneously, Intel has closed down its chip business for the auto industry and spun off its RealSense vision business as it retreats from non-core areas.
Nvidia and AMD are racing ahead in the AI chips competition as Intel turns its focus to AI and server chips in an attempt to regain relevance. Tan has vowed to cut $17 billion in operating costs this year, stating Intel needs to get leaner, faster, and more agile.
“The future of Intel is ours to build, but we have no time to waste,” he said.
In a significant move, the Intel CEO will also personally approve each key chip design before production, and it is a clear sign of more control at the top.