Intel Corp. is cutting thousands of jobs and restructuring global operations as part of a sweeping transformation under new CEO Lip-Bu Tan. The chipmaker, once a symbol of Silicon Valley innovation, now faces fierce competition from rivals like Nvidia Corp. and Advanced Micro Devices Inc, according to an AP report.
In a memo to employees on Thursday, Tan said Intel will reduce its ‘core’ workforce excluding subsidiaries, to 75,000 by the end of the year, down from 99,500 at the end of last year.
The move includes layoffs and attrition. “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.
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15% workforce cut, $1.9 billion in restructuring charges
Intel had earlier announced a 15 per cent reduction in its workforce and has now completed most of the related actions. As a result, the company booked $1.9 billion in restructuring charges in the second quarter of 2025. These were excluded from non-GAAP results but impacted GAAP earnings per share by $(0.45).
“These changes are designed to create a faster-moving, flatter and more agile organization,” the company said. Intel aims to hit a non-GAAP operating expense target of $17 billion by 2025.
Plans dropped in Germany, Poland; shift to Asia
To improve capital efficiency, Intel is canceling previously announced projects in Germany and Poland. It will also consolidate its assembly and testing operations in Costa Rica into larger facilities in Vietnam and Malaysia. “Costa Rica will remain a home to key engineering teams and corporate functions,” Tan said.
In the US, Intel is taking similar action, it will “further” slow construction of a semiconductor plant in Ohio. The company is targeting gross capital expenditures of $18 billion in 2025, aligning spending with current market demand.
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AI shift leaves Intel behind as Nvidia soars
Founded in 1968, Intel was once at the forefront of the personal computing revolution but has since stumbled. It missed the mobile wave triggered by Apple’s iPhone in 2007 and is now lagging in artificial intelligence, an area where Nvidia’s chips dominate.
Intel’s market capitalization stood at $98.71 billion as of Thursday’s close, compared to Nvidia’s staggering $4.24 trillion. “There are no more blank checks,” Tan wrote. “Every investment must make economic sense.”
Q2 loss deepens despite solid revenue
For the second quarter, Intel reported a net loss of $2.9 billion, or 67 cents per share — compared to a loss of $1.6 billion, or 38 cents per share, a year earlier. Excluding one-time charges, the adjusted loss was 10 cents per share.
Revenue came in flat at $12.9 billion, beating analyst expectations of $12 billion. “Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency,” said Lip-Bu Tan, Intel CEO.
“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.”
Intel CFO David Zinsner said the restructuring is already producing results. “Our results reflect solid demand across our business and good execution on our priorities,” he said. “The changes we are making to reduce our operating costs, improve our capital efficiency and monetize non-core assets are having a positive impact as we work to strengthen our balance sheet and position the business for the future.”
