Intel to Reduce Workforce by 24,000 Employees in 2025; Pulling Out of Various Projects Across Germany, Poland, and Other Locations

Intel Announces Significant Workforce Reduction and Strategic Shift

In a bid to streamline operations and improve financial stability, Intel has announced a workforce reduction of approximately 15%, which translates to around 24,000 jobs being cut. The aim is to create a leaner, more agile organization with enhanced operational efficiency [1][5].

The restructuring plan, which includes restructuring charges of $1.9 billion in Q2 2025, will primarily focus on strengthening Intel's core product portfolio, with a heavy emphasis on its AI roadmap [1]. However, the company has decided to pull back on some aggressive expansion plans in manufacturing, particularly in Europe and in the development of advanced process nodes [2][4].

Intel's decision to focus on its core products and AI roadmap comes as the company grapples with increased competition in the mobile chip and AI processor markets. The company has struggled to keep pace with competitors like Apple, AMD, NVIDIA, and Qualcomm since the 2000s [10].

The company's future success hinges on the success of its upcoming processors, including the Panther Lake and Nova Lake chips, and its 14A process node [8]. The success of the 14A process and foundry business, in particular, is crucial, with CEO Lip-Bu Tan indicating that funding for these projects is contingent on external demand [2][4].

The U.S. government, under the Trump administration, has expressed interest in taking up to a 10% stake in Intel by converting some of the grants it has awarded into equity. This move could bolster Intel's financial position and underscore the strategic importance of the company in the context of semiconductor supply chain concerns [3].

SoftBank has also shown confidence in Intel's turnaround potential by investing $2 billion in the company [3].

The restructuring plan, which will impact Intel locations in Ohio as well as assembly and testing operations in Costa Rica, is part of a broader effort to reduce spending by $17 billion over the next year [1][6]. Intel's former CEO Pat Gelsinger's offence to chip manufacturer TSMC, which led to TSMC terminating a lucrative agreement and increasing Intel's production costs, may have contributed to the company's financial struggles [2].

Intel's downsizing plans, which were announced last month, come on the heels of a string of operating losses for the company, with $7 billion in losses in 2023 on top of the $5.2 billion lost in 2022 [7]. The company has been downsizing its workforce frequently over the last few years [9].

The date for the next round of Intel layoffs is currently unknown. However, the company may announce more layoffs and project cancellations if the current plans aren't enough to keep up with competitors without losing money [11].

The restructuring plan, which includes a focus on AI restructuring and consolidating operations in Costa Rica and Vietnam, could mark a turning point for Intel. The company was once the biggest name in PC chip technology from the 80s through the early 2000s but grew overconfident and didn't keep up with changing trends [12].

More PCs are opting to use AMD chips over Intel processors this year, marking a shift from past practices [13]. However, Intel's future relies on its upcoming processors, and the company continues to lose money this quarter [14].

References:

Intel to cut 24,000 jobs as part of restructuring plan
Intel's Foundry Ambitions Face a Pivotal Moment
U.S. Government May Take Stake in Intel as Part of Federal Support Programs
Intel's Foundry Future: A Make-or-Break Moment
Intel's Restructuring Plan: A Leaner, More Efficient Intel
Intel to Reduce Spending by $17 Billion Over the Next Year
Intel Reports $7 Billion in Operating Losses in 2023
Intel's Upcoming Processors: Panther Lake and Nova Lake
Intel's Downsizing History: A Frequent Occurrence
Intel's Struggles in the Mobile Chip and AI Processor Markets
More Layoffs and Project Cancellations Possible for Intel
Intel's Past: Overconfidence Led to Neglect of Changing Trends
More PCs Opting for AMD Chips Over Intel Processors
Intel Continues to Lose Money This Quarter

Intel to Reduce Workforce by 24,000 Employees in 2025; Pulling Out of Various Projects Across Germany, Poland, and Other Locations