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By Hugh Cameron
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Embattled chipmaking giant Intel has announced plans for a further workforce reduction, as the company attempts to streamline operations by scaling back its worldwide manufacturing footprint.
In a memo sent to employees on Thursday, CEO Lip-Bu Tan said the company expected "workforce reductions and attrition" to reduce its headcount to 75,000 by the end of 2025. This compares to the 108,900 Intel boasted at the end of last year, of which 99,500 were core employees.
Tan, who took the helm in March following Pat Gelsinger's departure, said the company would be abandoning previously paused manufacturing projects in Germany and Poland, and slowing construction of new factories in Ohio to ensure "spending is aligned with demand."
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Why It Matters
Intel's employees are located globally, with significant concentrations in the America. The job cuts, many of which Tan said had already been completed, could affect thousands in the U.S. beyond those who would benefit from the planned Ohio factories.
The announcement comes at a difficult period for the Silicon Valley company: Its share price has continued to trend downward since early 2024 amid rising competition and perceived mismanagement by its executives.
What To Know
On Thursday, Intel reported its results for the second quarter, ending June 28. Revenue was flat at $12.9 billion, which exceeded forecasts and marked the end of a four-quarter streak of declining sales. However, the company also posted a quarterly net loss of $2.9 billion, close to doubling the loss for the same period last year.
The company's shares rose sharply in after-hours trading following the mixed results and the coinciding announcements regarding manufacturing and job cuts, but were down nearly five percent as of 4:30 a.m. ET.
In addition to slowing the construction of two planned factories in Ohio–which Intel said would create 3,000 company jobs and 7,000 construction jobs upon announcing the $28 billion project in 2022–CEO Tan announced the consolidation of its operations in Costa Rica to larger sites in Vietnam and Malaysia.
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"Over the past several years, the company invested too much, too soon – without adequate demand," Tan said in Thursday's memo. "In the process, our factory footprint became needlessly fragmented and underutilized. We must correct our course."
Tan added that the company intended to take a "judicious and disciplined" approach to its technology developments, and that future investments in its next-generation manufacturing technology, 14A, would be based on "confirmed customer commitments."
"There are no more blank checks," he said. "Every investment must make economic sense."
In a filing with the SEC, the company said it may be forced to pause or cancel the development of Intel 14A "if we are unable to secure a significant external customer."
What People Are Saying
Intel CEO Lip-Bu Tan, in his memo to employees, wrote: "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company."
"We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers," Tan said in an earnings press release. "We are also taking the actions needed to build a more financially disciplined foundry. It's going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability and create long-term shareholder value."
John Pitzer, vice president of investor relations, said in March that the company was "fully aligned" with the Trump administration's goal of onshoring manufacturing capabilities in the U.S.
"Our interests and the administration's interests are fully aligned. We like to remind people that as the administration drives to bring manufacturing back to the U.S., we never left."
A spokesperson for Intel told Newsweek the Ohio factory project "remains an important part of our long-term plans to expand leading-edge manufacturing on U.S. soil.
"Today's announcements are all about putting our foundry business on a more financially sustainable path going forward," they added. "Based on the progress we have made in Ohio, we continue to have flexibility to accelerate work based on customer demand."
What Happens Next?
Looking ahead, Intel expects third-quarter revenue to be between $12.6 and $13.6 billion, broadly in line with the $13.3 billion reported for the same period last year.
Although semiconductors are currently exempt from President Donald Trump's tariffs, Intel has noted heightened uncertainty among its customers over their potential economic impact.
Update 07/25/25 12:45 p.m. ET: This article was updated with additional comment from Intel.
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