Intel to lay off 24,000 employees, cancel billions in factory expansion; CEO Lip-Bu Tan says these are “hard but… decisions

Intel will slash around 24,000 employees this year – roughly a quarter of its workforce – while scrapping major expansion projects in Germany and Poland as new CEO Lip-Bu Tan implements sweeping cost-cutting measures to revive the struggling chipmaker’s fortunes.The semiconductor giant, which employed 99,500 core workers at the end of 2024, plans to finish 2025 with just 75,000 employees following what Tan described as “hard but necessary decisions” in his memo to staff Thursday. The cuts include layoffs already completed in the second quarter, where Intel eliminated about half of its management layers while booking $1.9 billion in restructuring costs.“There are no more blank checks. Every investment must make economic sense,” Tan wrote to employees, marking his most aggressive restructuring move since taking the helm in March. “We will build what our customers need, when they need it, and earn their trust through consistent execution.”The company reported a $2.9 billion quarterly loss on $12.9 billion in revenue, extending Intel’s longest losing streak in 35 years to six consecutive quarters. Despite beating Wall Street revenue expectations, Intel’s struggles highlight how far the once-dominant PC chip manufacturer has fallen behind rivals like Nvidia and AMD in the AI boom.

Intel’s major factories faces the axe, as European expansion plans are being scrapped

Intel is abandoning plans for a multibillion-dollar “mega-fab” in Germany that would have employed 3,000 workers, along with an assembly and test facility in Poland designed for 2,000 employees. The company had already paused these projects by two years in 2024 before axing them entirely under Tan’s leadership.The company will also consolidate its assembly and test operations in Costa Rica, affecting over 2,000 of the country’s 3,400 Intel employees, with operations moving to Vietnam and Malaysia.Construction of Intel’s $28 billion Ohio chip factory – originally slated for completion by 2025 – will slow further to “ensure spending is aligned with market demand,” CFO David Zinsner said. The project, supported by Biden’s CHIPS Act funding, now likely won’t finish until after 2030.“Over the past several years, the company invested too much, too soon – without adequate demand,” Tan explained. “In the process, our factory footprint became needlessly fragmented and underutilized.”

Lip-Bu Tan’s workforce overhaul targets management bloat and remote work

While Intel’s workforce reductions aren’t new – the company has been quietly shedding employees since April – Tan’s announcement provides the clearest picture yet of the restructuring’s scope. The CEO confirmed Intel is “implementing a plan to reduce our headcount by approximately 15%” through both layoffs and attrition, with the company having “completed a significant amount of our workforce reductions in Q2, streamlining the number of management layers by about 50% in the process.”Beyond job cuts, Intel is also tightening workplace policies, with Tan announcing the company is “on track to implement our return-to-office policy in September, with sites completing necessary improvements to operate at full capacity.” Previous CEO Pat Gelsinger had overseen massive factory expansion betting on contract manufacturing, but spokesperson Sophie Metzger had deflected layoff questions earlier this year, saying the company “had not set any headcount reduction target.”The restructuring extends beyond manufacturing, with Intel shutting its automotive chipmaking business in June and spinning off its RealSense computer vision unit in July. Tan justified the painful cuts as necessary cultural transformation, stating the moves are “designed to drive organizational effectiveness and transform our culture. We will become a faster, more agile and more vibrant company.”The CEO emphasized that eliminating bureaucracy would “empower engineers to innovate with greater speed and focus” while reducing costs “to enable investments in future growth.” Tan aims to slash operating expenses by $17 billion this year while refocusing on AI chips and regaining PC processor market share from rivals like AMD and Nvidia.“Q2 was the first step in the right direction,” Tan told employees. “The future of Intel is ours to build – but we have no time to waste.”