Intel Corp. is laying off 15% of its workforce—approximately 15,000 employees—as it struggles to regain its competitive edge against industry leaders like Nvidia and AMD. The Santa Clara-based company announced the sweeping cuts Thursday as part of a broader plan to reduce costs by $10 billion in 2025.
Intel CEO Pat Gelsinger informed employees in a company-wide memo, citing the need to align expenses with a new operating model. “Our revenues have not grown as expected—and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low,” he wrote.
The layoffs follow a disappointing financial quarter. Intel reported a $1.6 billion loss for the April-June period, a sharp decline from its $1.5 billion profit in the same quarter the previous year. Revenue slipped 1% to $12.8 billion, missing analysts’ expectations of $12.9 billion. The company also forecasted weak third-quarter results, prompting a suspension of its stock dividend to further trim expenses.
Gelsinger acknowledged the difficulty of the decision, calling it “the hardest thing I’ve done in my career.” Most job cuts will take place this year. Additionally, Intel will introduce an “enhanced retirement offering” and a voluntary departure program for eligible employees next week.
The restructuring comes as Intel seeks to capitalize on U.S. investment in domestic semiconductor manufacturing. In March, President Joe Biden announced up to $8.5 billion in direct funding and $11 billion in loans to support Intel’s chip plants. Biden previously praised Intel’s $20 billion project near Columbus, Ohio, which aims to create 7,000 construction jobs and 3,000 full-time positions with an average salary of $135,000 per year.
Despite these investments, analysts remain skeptical. “Intel’s cost-cutting measures may help in the short term, but they won’t be enough to redefine its role in the evolving chip market,” said eMarketer analyst Jacob Bourne. He emphasized Intel’s need to leverage AI demand and domestic manufacturing to solidify its future.
Following the announcement, Intel’s stock plunged 18% in after-hours trading to $23.82, reflecting investor concerns over the company’s future stability.