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Intel to cut 22% of workforce by year-end
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The job cuts are part of Intel CEO Tan’s plans to fix past spending mistakes
Intel is set to slash more than a fifth of its workforce by the end of 2025, it announced on Thursday, as new CEO Lip-Bu Tan spearheads Intel’s restructuring efforts to regain market share with “no more blank checks”.
The company has already begun to shrink its workforce by 15% from 96,400 that it reported at the end of June and plans to further reduce it to 75,000 at year’s end, down 22% from the end of 2024, through attrition and “other means”, Intel said in a statement.
Since taking on the role in March, Tan has led a series of job cuts, businesses divestments, and resource streamlining in a bid to revitalize a storied US chipmaker that’s been plagued by years of underperformance and management blunders. Intel has zero foothold in the booming AI chip industry that’s currently being dominated by Nvidia, while longtime rival AMD is steadily gaining share in Intel’s mainstay personal computer and semiconductor market. Its ambitious and costly investment in external foundry services to Taiwan’s TSMC has also been “unsuccessful to date in attracting significant customers”, the company wrote in an SEC filing in July.
"There are no more blank checks," Tan wrote in a memo to employees. "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’s finance David Zisner told Reuters that the company is taking a “surgical” approach in its layoffs by removing layers of middle management positions. “We took out about 50% of the layers of the company,” he said.
Tan also said Intel is changing its strategy for building semiconductor manufacturing facilities and now plans to build factories only in locations where there is demand for its chips. Previously, the company had built factories ahead of demand.
The company also announced plans to slow down the construction of its new factories in Ohio and halt planned factories in Poland and Germany. It will also consolidate its chip packaging operations in Costa Rica with its other packaging operations in Vietnam and Malaysia.
"I do not subscribe to the belief that if you build it, they will come," Tan said on a call with analysts, adding that he will personally review and approve each of Intel's major chip designs.
Intel’s restructuring comes as it and other chipmakers are experiencing economic headwinds due trade uncertainties. While semiconductors are currently exempt from US President Donald Trump’s sweeping tariffs, customers are pulling shipments forward to the first half of the year due to market instability.
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