Intel Cuts 22% of Workforce as New CEO Enacts Major Overhaul

Intel has announced plans to reduce its workforce by 22%, cutting approximately 21,400 positions from its current total of 96,400 employees. This significant reduction is part of a broader restructuring strategy initiated by new CEO Lip-Bu Tan, aimed at transforming the company into a more disciplined and cost-conscious organization. The layoffs are expected to be completed by the end of 2025, according to the announcement made during the company’s second-quarter earnings call.

In a letter to employees, Tan communicated a decisive shift in Intel’s operational philosophy, emphasizing a need for fiscal responsibility. “There are no more blank checks,” he stated. “Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution.”

Restructuring Amid Mixed Financial Performance

This workforce reduction coincides with mixed financial results for the second quarter of 2025. Intel reported revenue of $12.9 billion, which remained flat year-over-year. However, the company also faced a net loss of $2.9 billion, nearly doubling its loss from the same period last year. Looking ahead, Intel forecasts a challenging third quarter, with expected losses of 24 cents per share, surpassing Wall Street’s estimates of 18 cents per share.

Tan acknowledged the difficulties faced in recent months but highlighted the importance of maintaining strategic focus. “We delivered revenue above the high end of our guidance, reflecting solid demand and execution across the business,” he noted, while also recognizing the challenges that lie ahead.

Streamlining Operations and Revising Strategy

Intel’s job cuts are part of a calculated approach to streamline operations. Tan indicated that the company has already reduced management layers by approximately 50% during the second quarter. This restructuring builds upon earlier workforce reductions announced in 2024, when Intel eliminated 15,000 jobs under former CEO Pat Gelsinger. The company has already recognized $1.9 billion in restructuring charges for the recent quarter.

In his communication, Tan emphasized the necessity of these difficult decisions to enhance efficiency and accountability within the organization. “We are making hard but necessary decisions to streamline the organization,” he wrote, underscoring the goal of transforming Intel’s corporate culture.

Tan’s leadership marks a significant departure from Gelsinger’s strategy, particularly regarding Intel’s foundry expansion plans. He criticized previous investments as excessive, stating, “Over the past several years, the company invested too much, too soon – without adequate demand.” To correct this, Intel will not move forward with previously planned projects in Germany and Poland, and will consolidate assembly and testing operations in Costa Rica to larger sites in Vietnam and Malaysia.

Focus on Technology Development and AI Strategy

As part of his strategic overhaul, Tan has also outlined a more disciplined approach to technology development. He identified “ramping Intel 18A at scale” as a priority for both Intel’s products and specific customers, including the U.S. government. Looking ahead, the company plans to develop Intel 14A as a foundry node for external clients, with investments contingent upon confirmed customer commitments.

In addition, Tan has instituted new oversight procedures for chip designs, with every major design requiring his approval before proceeding. This change aims to improve execution and reduce development costs.

Tan’s vision includes revitalizing Intel’s traditional x86 processor business and refining its AI strategy. He has flagged Panther Lake as a key focus for client computing, while also addressing a technical reversal in data center technology with the reintroduction of simultaneous multi-threading (SMT), which had previously put Intel at a disadvantage.

The current wave of job cuts at Intel reflects broader trends in the technology sector, where many companies are adopting cost-cutting measures despite signs of improving economic conditions. Notably, major firms like Microsoft and Cisco have also announced significant layoffs this year.

As Intel prepares for the future, Tan emphasizes the urgency of the situation. He conveyed to employees, “The future of Intel is ours to build, but we have no time to waste. We must continue acting with urgency, discipline, and focus in everything we do.”