Intel to slash over 25,000 jobs, abandon European factory plans as turnaround struggles

Intel said on Thursday it expects to reduce its workforce by more than 25,000 employees this year as the ailing US chipmaker deepens cost-cutting efforts to stem losses and revive its manufacturing business.

The company, which reported 108,900 employees at the end of last year, said layoffs, attrition and other actions would shrink its headcount to around 75,000 by the end of 2025.

Intel also scrapped plans to build factories in Germany and Poland and will further slow new factory construction in Ohio. Operations in Costa Rica will be consolidated into larger sites in Vietnam and Malaysia.

The latest cuts follow a reduction of more than 15,000 jobs last year. Since signalling cost cuts in April, Intel said it has already reduced its workforce by about 15% — roughly 15,000 people.

Intel reported a net loss of $2.9 billion for the second quarter, largely due to restructuring charges, even as revenue was flat at $12.9 billion, beating analysts’ estimates.

The company projected another loss in the current quarter with revenue guidance of $12.6 billion to $13.6 billion, slightly ahead of expectations.

Lip-Bu Tan, Intel's CEO, told employees in a memo that the past few months “have not been easy” as he pushes ahead with workforce reductions and manufacturing cutbacks to “streamline the organisation, drive greater efficiency and increase accountability.”

Tan, a former Intel board member and venture capitalist, replaced Pat Gelsinger in December and has pledged to reduce bureaucracy, accelerate innovation and restore competitiveness against rivals like AMD and Nvidia. But he has stopped short of more drastic measures such as spinning off Intel’s struggling chip manufacturing business.

Intel said it remains on track to roll out high-volume production using its 18A manufacturing technology this year, seen as crucial for its competitiveness. However, in a regulatory filing, it warned it may abandon development of its next-generation 14A process without securing a significant external customer.

“Over the past several years, the company invested too much, too soon – without adequate demand,” Tan said in a letter to employees. “Our factory footprint became needlessly fragmented and underutilized. We must correct our course.”

Shares in Intel fell about 3% in after-hours trading, after closing down 3.7% on Thursday. The stock has risen about 13% so far this year following Tan’s appointment, but remains down nearly 30% over the past 12 months.