Intel to cut 24,000 jobs, cancels factory plans in Germany and Poland
Aims to massively reduce workforce through 2025
Intel will dismiss 24,000 employees, around 15% of its workforce, and is cancelling chip factory projects in Germany and Poland.
The layoffs comes despite better-than-expected revenue in Intel’s second-quarter results, as new CEO Lip-Bu Tan seeks to reset the chipmaker's strategic direction amid mounting losses and fierce industry competition.
Intel reported $12.9 billion in revenue for Q2 2025, surpassing analyst expectations of $11.92 billion, but still recorded a net loss of $2.9 billion for the quarter – an increase from a $1.61 billion loss a year earlier.
The cuts represent one of the most significant restructurings in Intel's history, and Tan acknowledged their severity in a memo to employees last week.
"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," he said.
Intel aims to reduce its headcount to approximately 75,000 “core employees” (it doesn’t define this term) by the end of 2025. It ended last year with about 110,000 staff, of which 99,500 were so-called core employees.
The just-announced reorganisation also includes slashing management layers by 50%, a move Tan said is aimed at eliminating bureaucracy and raising speed and precision.
A full return-to-office (RTO) policy will also go into effect this September, which is sure to be as popular as it has been at other tech firms.
Tan confirmed that Intel will cancel its highly publicised semiconductor fabrication plants in Germany and Poland, citing an oversupply of capacity and inadequate demand.
"Over the past several years, the company invested too much, too soon-without adequate demand," Tan wrote.
"In the process, our factory footprint became needlessly fragmented and underutilised."
In addition to the European cancellations, Intel will consolidate its testing and assembly operations in Vietnam and Malaysia and slow down the pace of construction on its Ohio chip facility unless significant customer commitments are secured.
Tan stressed that all future investments will be tightly controlled.
"There are no more blank cheques. Every investment must make economic sense."
Foundry division struggles
Intel's foundry business, aimed at manufacturing chips for third parties, continues to be a major drag on profitability. The unit posted an operating loss of $3.17 billion on revenue of $4.4 billion.
Intel is still seeking a major customer to anchor this division and has scaled back its ambitions accordingly.
Tan announced that the next-generation chip manufacturing process, dubbed 14A, will only proceed based on confirmed customer orders.
Mixed performance across divisions
Intel's client computing group, primarily driven by PC chip sales, brought in $7.9 billion in Q2, down 3% year-over-year.
In contrast, the company's datacentre group, which includes some AI-related products, saw a 4% revenue bump to $3.9 billion. However, the company continues to lose ground in the server market, particularly to rival AMD.
Tan said that Intel is actively seeking a new permanent leader for its datacentre division and that he will personally approve all future chip designs before the final manufacturing phase.
Despite the unrest among staff the announcement generated, investors showed cautious optimism.
Intel shares are up 13% so far in 2025, recovering slightly from a catastrophic 60% plunge in 2024 – the worst year on record for the company.
Intel expects third-quarter revenue to reach $13.1 billion, at the midpoint of its guidance, slightly ahead of the analyst average estimate of $12.65 billion.
The company forecasts it will break even for the quarter, versus Wall Street's expectation of 4 cents per share in earnings.