Intel slashes 15% workforce to curb massive losses, revive AI ambitions.
Intel cuts 15% of its workforce after a $19 billion loss and AI setbacks, battling for its very survival.
July 28, 2025

In a dramatic move to staunch severe financial hemorrhaging and reclaim its footing in a fiercely competitive semiconductor landscape, Intel is slashing its global workforce by approximately 15 percent.[1][2] This sweeping restructuring, initiated by new CEO Lip-Bu Tan who took the helm in March, comes on the heels of a staggering $19 billion loss in 2024 and a series of critical manufacturing missteps that have allowed rivals to surge ahead, particularly in the booming artificial intelligence sector.[3][4][5] The workforce reduction is a core component of a broader, aggressive strategy to stabilize the American chipmaking giant, which has been a cornerstone of the technology industry for decades. The company plans to reduce its core workforce to about 75,000 employees by the end of 2025, down from 99,500 at the end of 2024, a move that includes significant cuts to management layers.[6][2] "There are no more blank checks," Tan wrote in a stark memo to employees, signaling a new era of fiscal austerity and operational discipline aimed at reviving the struggling titan.
The financial crisis gripping Intel is multifaceted, stemming from both internal execution failures and a failure to adapt to major market shifts.[3][4] The company reported a full-year net loss for 2024, a stark contrast to the profits of previous years, and has recorded six consecutive quarters of losses, its longest such streak in 35 years.[6] Revenue for full-year 2024 was $53.1 billion, a 2% decrease year-over-year.[7][8] A significant factor has been the prolonged delays in advancing its manufacturing process technology, specifically the transition to smaller, more efficient nodes like 7nm and 10nm.[3] These setbacks allowed competitors, chiefly AMD and Nvidia, to capitalize by leveraging the more advanced and reliable manufacturing capabilities of Taiwan's TSMC.[3][4] As a result, Intel lost significant market share in its traditional strongholds of PC and server processors and, crucially, fell far behind in the race to produce the high-performance chips that power the AI revolution.[4][5][9] The company’s Gaudi AI accelerator chips, for instance, have struggled to gain traction against Nvidia’s dominant offerings, with Intel recently withdrawing a sales forecast of over $500 million for the product line.[10][9]
In response to this existential crisis, CEO Lip-Bu Tan has articulated a three-pillar strategy designed to fundamentally reshape the company. The first pillar is a relentless focus on cost-cutting and operational efficiency. The 15% workforce reduction is the most visible part of this, projected to contribute to a $10 billion cost reduction plan.[11][12] This includes streamlining the organization by cutting management layers by as much as 50% to create a "flatter and more agile organization."[1][2] Beyond layoffs, Intel is aggressively scaling back its capital-intensive expansion plans. The company has scrapped major projects for new factories in Germany and Poland and is slowing the pace of construction at its $28 billion site in Ohio.[6][13][14] Operations are also being consolidated, with assembly and test functions in Costa Rica moving to facilities in Vietnam and Malaysia.[6][13] Tan's message is clear: every investment must be justified by market demand and a clear path to profitability.[6]
The second pillar of the turnaround strategy involves a sharpened focus on regaining technological leadership and executing on its product roadmap. A central element of this was the IDM 2.0 strategy championed by former CEO Pat Gelsinger, which Tan's administration is now tasked with refining and executing under immense financial pressure.[3] This strategy involves not only revitalizing Intel's own product development but also building out its foundry services to manufacture chips for other companies, directly competing with TSMC and Samsung.[3][14] A critical milestone for this plan is the successful launch of its 18A process node, which the company hopes will restore its manufacturing excellence and allow it to be competitive by 2025.[15][16] However, the path is fraught with challenges, as some customers have reportedly been hesitant to commit to the unproven 18A process.[4][15] The company is also realigning its product groups to focus on three key areas: client and edge computing, traditional data centers, and AI data centers, aiming for a more targeted approach to innovation.[9]
The third pillar is a strategic realignment of Intel's role within the global semiconductor ecosystem, with a particular emphasis on the AI market. While candidly admitting that Nvidia has surpassed Intel in AI chips, Tan's strategy is not to cede the field but to find a different path to relevance.[17] The plan involves focusing less on competing directly with Nvidia in the market for training massive AI models and more on the "inference" side of AI—where models are put to practical use—and on building AI capabilities directly into its core PC and server products.[18] Furthermore, by building out its foundry business, Intel aims to become an essential manufacturer for the entire AI industry, producing chips for a wide range of companies, even its competitors.[19] This positions Intel to profit from the overall growth of the AI market, regardless of whose chip designs are dominant. This ambitious pivot is supported by the U.S. CHIPS and Science Act, from which Intel has been awarded billions in funding to bolster domestic manufacturing.[7][15]
The reverberations of Intel's crisis and subsequent restructuring will be felt across the technology landscape. For the AI industry, the primary implication is the potential for a less concentrated supply chain. A successful revival of Intel's foundry business could provide a viable alternative to TSMC, mitigating geopolitical risks associated with Taiwan and potentially lowering costs through increased competition. However, in the short term, Intel's manufacturing scale-back and focus on profitability could constrain the supply of certain chips, impacting smaller players who rely on them. The company's struggles highlight the intense capital and R&D investment required to stay at the leading edge of semiconductor manufacturing. For decades, the industry has relied on the steady march of Moore's Law, driven largely by Intel. Now, with the one-time leader forced into a painful and protracted turnaround, the future of chip innovation and its critical role in powering the AI economy hangs in the balance, contingent on whether Intel's drastic measures can forge a path back to leadership.
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