Intel is ready to conclude the 12 months with a workforce greater than 20% smaller than final 12 months, as a part of CEO Lip Bu Tan’s technique to streamline operations and rectify previous administration errors.
Since assuming management in March, Tan has initiated job cuts and asset divestments to refocus the corporate’s efforts on core companies. The vast majority of these job cuts have already been executed, leading to an general discount of round 15%.
The cuts have predominantly focused center administration, with CFO David Zinsner confirming a discount of about 50% in administration layers, reported Reuters.
Intel’s workers will lower from 96,400 on the finish of June to roughly 75,000 by the year-end. These adjustments align with Tan’s directive that investments should be economically justified and tailor-made to buyer demand.
The agency’s underperformance in key sectors like AI chips, which is dominated by Nvidia, and private pc semiconductors, the place AMD has gained floor, has prompted this restructuring.
Moreover, Intel’s try to construct a aggressive chip contracting enterprise towards Taiwan’s TSMC has not progressed as deliberate.
Monetary forecasts for the third quarter predict a lack of $0.24 per share, with projected income between $12.6bn and $13.6bn.
Within the second quarter ended 28 June 2025, Intel reported flat income year-over-year at $12.9bn, with earnings impacted by restructuring prices amounting to $1.9bn.
CEO Tan emphasised a shift in manufacturing technique in his memo to workers, stating Intel will solely assemble new services based mostly on precise demand moderately than speculative progress. This strategy marks a departure from earlier practices the place factories have been constructed forward of want.
Tan additionally addressed Intel’s 18A manufacturing course of throughout an analyst name, noting its potential profitability if deployed for Intel’s personal merchandise. Nonetheless, he acknowledged that with out securing vital exterior prospects for the next-generation 14A course of know-how, exiting the chip manufacturing enterprise could be needed.
Going ahead, Intel plans to consolidate packaging operations throughout a number of international locations whereas slowing or halting new manufacturing facility building in areas like Ohio, Poland, and Germany as a part of its strategic realignment.
Tan mentioned: “We’re laser-focused on strengthening our core product portfolio and our AI roadmap to higher serve prospects. We’re additionally taking the actions wanted to construct a extra financially disciplined foundry.
“It’s going to take time, however we see clear alternatives to boost our aggressive place, enhance our profitability and create long-term shareholder worth.”
Individually, a US federal decide dismissed a lawsuit alleging Intel misled shareholders about points in its foundry enterprise. The courtroom dominated that Intel didn’t delay disclosing a serious working loss and maintained transparency relating to its operations.
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