Santa Clara, CA – Intel Corporation announced a significant restructuring effort, including the elimination of approximately 24,000 jobs by the end of 2025 and the cancellation of major factory projects in Germany and Poland. The move comes as the semiconductor giant reported a net loss of $2.9 billion on $12.9 billion in revenue for the second quarter of 2025, alongside a $1.9 billion charge for severance and restructuring. The company aims to reduce its core staff to around 75,000 employees.
The decision reflects a strategic shift under new CEO Lip-Bu Tan, who stated in a recent memo that past leadership "ordered fabs first, chased customers later." Tan is now reversing this approach, indicating that new manufacturing plants will only be pursued when firm purchase commitments are in place. This pivot addresses concerns over earlier over-building and aims to align spending with actual market demand.
Intel will no longer proceed with planned multibillion-dollar "mega-fab" facilities in Germany and an assembly and test facility in Poland, which were expected to create thousands of jobs. Additionally, the company is consolidating its assembly and test operations in Costa Rica into larger sites in Vietnam and Malaysia, though over 2,000 Costa Rica employees are expected to remain in engineering and corporate roles. Construction on Intel's $28 billion Ohio chip factory will also be slowed.
The company's management claims these sweeping changes are designed to slice $17 billion in annual expenses, targeting improved efficiency and a return to profitability. Intel aims to reduce operating expenses to $17 billion in 2025 and further to $16 billion by 2026. This cost-cutting initiative is crucial as Intel navigates a challenging market, including what it described as weak AI demand impacting its previous expansion plans.
Despite the current financial setbacks, Intel remains focused on its product roadmap. The company is preparing for the launch of its upcoming Panther Lake and Nova Lake laptop processors. Panther Lake, the lead product on Intel's 18A process node, is expected in the second half of 2025, followed by Nova Lake in 2026, signaling Intel's continued commitment to innovation in its core computing segments.