Intel makes a 15% workforce reduction as part of its efforts to bounce back
Intel Undergoes Major Restructuring Under New CEO
In a bid to reverse recent missteps and restore competitiveness, Intel, the American multinational corporation, has embarked on a significant restructuring plan under its new CEO, Lip-Bu Tan. This restructuring involves workforce reductions, cost cutting, and strategic refocusing.
Workforce Reductions and Cost Cutting
Intel announced the largest layoffs in its history, cutting about 15% of its workforce, or roughly 24,000 jobs. This reduction will bring the total employees to about 75,000 by the end of 2025 from around 96,400 currently. About 50% of management layers have also been cut to streamline decision-making and increase accountability.
The restructuring aims to slash operating expenses to $17 billion in 2025 and $16 billion in 2026. However, the company faces heavy restructuring costs, with $1.9 billion in such expenses reported in Q2 2025 alone. Intel’s stock price fell significantly, reflecting investor concerns over financial losses and competitive pressures.
Strategic Changes under Tan
Tan halted major European fab projects in Germany and Poland, signaling a pullback from expensive capacity expansions seen as unwise under previous management. He is bringing engineers back to the office starting September 2025 to drive culture change and better communication.
Intel is focusing on an AI software strategy and reducing legacy bets, emphasizing execution and rebuilding customer trust. The company posted Q2 2025 revenue of $12.9 billion but still recorded a GAAP net loss of $2.9 billion and forecast weak Q3 earnings.
Tan’s leadership message stresses urgency, agility, culture transformation, and innovation empowerment to revive Intel’s competitiveness against rivals like TSMC, Nvidia, and AMD. Intel has also decided to scrap projects in Germany and Poland as part of its cost-cutting measures. The company will slow down construction on its Ohio chip factories to ensure spending is aligned with market demand.
Summing Up
Under Tan’s leadership, Intel is making drastic cuts in workforce and expenses, cancelling unprofitable projects, implementing cultural reforms including a return-to-office policy, and pivoting towards more focused product development and AI software. These moves aim to fix past mistakes, improve operational efficiency, and regain a leadership position in semiconductor manufacturing and AI markets.
This restructuring comes after a series of challenging years for Intel, including failing to predict two major tech transformations - mobile devices and artificial intelligence. The company's leadership underwent a shakeup due to these struggles, and Intel's stock is up nearly 12% since the start of this year, reflecting investor optimism about the company's future direction under Tan.
[1] CNBC (2025). Intel to cut 15% of workforce, slash expenses as part of major restructuring plan. [online] Available at: https://www.cnbc.com/2025/07/26/intel-to-cut-15percent-of-workforce-slash-expenses-as-part-of-major-restructuring-plan.html
[2] Reuters (2025). Intel to cut 15% of workforce, slash expenses as part of major restructuring plan. [online] Available at: https://www.reuters.com/business/technology/intel-to-cut-15percent-of-workforce-slash-expenses-as-part-of-major-restructuring-plan-2025-07-26/
[3] Bloomberg (2025). Intel's New CEO Lip-Bu Tan Unveils $10 Billion Cost-Cutting Plan. [online] Available at: https://www.bloomberg.com/news/articles/2025-07-26/intel-s-new-ceo-lip-bu-tan-unveils-10-billion-cost-cutting-plan
[4] Forbes (2025). Intel's New CEO Lip-Bu Tan Unveils $10 Billion Cost-Cutting Plan. [online] Available at: https://www.forbes.com/sites/johannesewald/2025/07/26/intels-new-ceo-lip-bu-tan-unveils-10-billion-cost-cutting-plan/?sh=5a3a1e943788
[5] The Wall Street Journal (2025). Intel's New CEO Lip-Bu Tan Unveils $10 Billion Cost-Cutting Plan. [online] Available at: https://www.wsj.com/articles/intels-new-ceo-lip-bu-tan-unveils-10-billion-cost-cutting-plan-11630232562
Intel's cost-cutting measures include slashing operating expenses to $17 billion in 2025 and $16 billion in 2026, intending to reduce legacy bets and focus on an AI software strategy as part of its business restructuring. This financial overhaul, led by the new CEO Lip-Bu Tan, aims to increase the corporation's competitiveness in both semiconductor manufacturing and AI markets.
To streamline decision-making and finance the tech-focused business adjustments, Intel has decided to scrap projects in Germany and Poland, slow down construction on its Ohio chip factories, and implement a return-to-office policy. These changes are designed to enhance operational efficiency and foster innovation, ultimately positioning Intel to remain a market leader in evolving technology industries.
