In an attempted turnaround, chipmaker Intel has mostly completed plans it announced last quarter to cut 15% of its workforce.
The layoffs, tucked in Intel’s second quarter earnings report, marked one of the first major decisions by new CEO Lip-Bu Tan, who took over the company’s top job in March.
“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”, Tan said in a press release announcing the earnings results.
Intel shares (INTC) rose 3% in after-hours trading following the news, although it posted a quarterly net loss of $2.9 billion, nearly double its loss during the same period in the prior year. The stock is up nearly 12% since the start of this year, suggesting that while Intel’s future is far from certain, investors have confidence in Tan.
Intel said the staff reduction is “designed to create a faster-moving, flatter and more agile organisation”. The company reported having 108,900 employees as of the end of 2024 across Intel and its subsidiaries, which include autonomous driving company Mobileye. The company said it plans to end 2025 with 75,000 employees in its core Intel division — not including subsidiaries — as a result of “workforce reductions and attrition. Intel filed a layoff notice in Oregon earlier this month indicating plans to cut nearly 2,400 workers.
The company also said it’s scrapping projects in Germany and Poland as part of its cost cutting measures and will slow down construction on its Ohio chip factories “to ensure spending is aligned with market demand.”
Intel has had a series of bruising years that saw the one-time industry leader fall behind rivals after it failed to predict two major tech transformations — mobile devices and artificial intelligence — prompting takeover rumours and a leadership shakeup. Meanwhile, rival Nvidia’s market capitalisation (NVDA) briefly crossed $4 trillion earlier this month, making it the first publicly traded company to do so.
Last summer, Intel said it would slash 15% of its staff, 15,000 jobs, part of a $10 billion plan to reduce costs as it tried to play catch-up in the AI chipmaking race.
Intel is one of several tech giants to implement layoffs this year. Microsoft laid off around 9,000 workers in early July, while Meta cut about 5% of employees in January.
Source: CNN
Image Credit: Intel
