Intel Slashes Workforce 22% as New CEO Lip Bu Tan Enforces Cost Discipline

Intel (NASDAQ: INTC) will end 2025 with a workforce over 20% smaller than last year as new CEO Lip Bu Tan pushes aggressive cost-cutting to revive the struggling chipmaker. The company plans to reduce headcount to 75,000 by year-end, down from 96,400 in June, through layoffs, attrition, and restructuring.

Tan, who took over in March, is abandoning Intel’s previous “blank check” spending, vowing only to fund projects that make “economic sense.” The company is scaling back its once-ambitious chip foundry strategy, slowing construction of factories in Ohio and halting planned facilities in Germany and Poland. It will also consolidate chip packaging operations from Costa Rica to Vietnam and Malaysia.

Intel has faced years of missteps, losing ground in AI chips to Nvidia (NASDAQ: NVDA) and ceding PC and server market share to AMD (NASDAQ: AMD). Its 18A manufacturing process, once touted as a breakthrough, will now primarily serve Intel’s own products. The company signaled it could exit chip manufacturing altogether if it fails to secure major customers for its upcoming 14A process.

Despite revenue of $12.9 billion in Q2, Intel reported a loss of 67 cents per share, wider than analysts expected. It forecasts a Q3 loss of 24 cents per share, exceeding Wall Street’s projections, sending shares down 4.5% in after-hours trading.

Tan emphasized a shift toward demand-driven factory builds: “I do not subscribe to the belief that if you build it, they will come.” By cutting middle management layers by 50% and prioritizing disciplined execution, Intel aims to regain competitiveness amid growing pressure from rivals and shifting global semiconductor demand.