Intel Plans Major Workforce Reduction Amid Strategic Shift

Intel has announced a significant reduction in its workforce, aiming to cut approximately 15% of its employees by the end of 2025. This decision translates to around 24,000 job losses, reducing the company’s workforce from approximately 96,400 to about 75,000. The layoffs are part of a broader turnaround strategy introduced by the new CEO, Lip-Bu Tan, who took over in March 2025.

Under Tan’s leadership, Intel is prioritizing cost reduction, efficient production, and disciplined investment practices. In a memo to employees, Tan emphasized that future factory constructions will depend on actual demand rather than speculative growth. Consequently, the company has postponed the construction of chip factories in Ohio and abandoned plans for facilities in Poland and Germany. “There are no more blank checks,” Tan stated. “Every investment must make economic sense.”

Despite the challenging circumstances, Intel reported revenues of $12.9 billion for the second quarter of 2025, marking an end to a four-quarter streak of declining sales. However, the company also recorded a net loss of $2.9 billion, which includes $1.9 billion attributed to restructuring costs.

Strategic Focus on AI and Remote Work Policy Changes

Tan’s strategic shift includes a decisive end to remote work, aiming to enhance collaboration and productivity. The CEO has outlined a clear focus on reclaiming Intel’s position in the competitive artificial intelligence (AI) landscape, where it currently lags behind Nvidia. “We will focus our AI efforts on developing a cohesive silicon, system, and software stack strategy,” Tan noted. “In the past, we have approached AI with a traditional, silicon- and training-centric mindset. This needs to change.”

Looking ahead, Intel projects higher revenue for the third quarter of 2025, estimating between $12.6 billion and $13.6 billion. However, it also anticipates greater losses per share as the company navigates this significant transition.

The strategic changes at Intel reflect the challenges faced by the tech industry as companies adapt to shifting market demands and competitive pressures. The measures taken by Tan signal a commitment to restoring the company’s financial health while positioning it for future growth in key technology sectors.