Intel to lay off 22% of workforce as CEO Tan signals ‘no more blank checks’

Intel will reduce its workforce by 22% to 75,000 employees by the end of 2025 as new CEO Lip-Bu Tan implements sweeping changes designed to transform the struggling chipmaker into a more disciplined, cost-conscious organization, the company said during its second-quarter earnings call Thursday.

The Santa Clara-based semiconductor giant will cut 21,400 positions from its current workforce of 96,400 employees reported as of June 28, according to the company’s Q2 earnings report. While CEO Tan described the reduction as “approximately 15%” in his letter to employees, the actual mathematics of reducing from 96,400 to 75,000 employees represents a 22% workforce cut.

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The cuts represent the culmination of a restructuring effort that began when Tan took the helm in March, replacing interim co-CEOs following Pat Gelsinger’s abrupt retirement in December.

In a letter to employees following the earnings announcement, Tan signaled a fundamental shift in Intel’s operational philosophy. “There are no more blank checks,” he wrote. “Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution.”

Mixed financial results drive strategic pivot

The workforce reduction comes as Intel reported mixed second-quarter results that beat revenue expectations but fell short on profitability. Second-quarter revenue was $12.9 billion, flat year-over-year, while the company posted a net loss of $2.9 billion, nearly double its loss during the same period last year.

Looking ahead, Intel forecast third-quarter losses that exceed Wall Street estimates. The company expects a third-quarter loss of 24 cents per share, steeper than estimates of losses of 18 cents per share, according to LSEG data.

“This afternoon, we reported our Q2 2025 results. We delivered revenue above the high end of our guidance, reflecting solid demand and execution across the business,” Tan wrote to employees. However, he acknowledged the challenges ahead: “I know the past few months have not been easy.”

‘Surgical’ approach targets management layers

Intel’s latest job cuts follow what the company describes as a strategic approach to organizational restructuring. “We completed a significant amount of our workforce reductions in Q2, streamlining the number of management layers by about 50% in the process,” Tan told employees.

The restructuring builds on earlier workforce reductions announced in 2024, when Intel cut 15,000 jobs under former CEO Pat Gelsinger. Intel recognized $1.9 billion in restructuring charges during the second quarter, which were excluded from its non-GAAP results.

“We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company,” Tan wrote, adding that the changes are “designed to drive organizational effectiveness and transform our culture.”

Foundry strategy undergoes major revision

Tan’s leadership marks a significant departure from his predecessor’s ambitious foundry expansion plans. In his letter, he outlined a “fundamentally different approach” to building Intel’s foundry business, criticizing past investments as excessive and premature.

“Over the past several years, the company invested too much, too soon – without adequate demand. In the process, our factory footprint became needlessly fragmented and underutilized,” Tan wrote. “We must correct our course.”

The strategic shift includes concrete changes to Intel’s global manufacturing footprint. The company “decided not to move forward with previously planned projects in Germany and Poland” and will “consolidate our assembly and test operations in Costa Rica to our larger sites in Vietnam and Malaysia.”

For US operations, Intel is “further slowing construction in Ohio to ensure our spending is aligned with demand – while maintaining flexibility to accelerate based on new customer wins.”

Technology development gets sharper focus

Tan also outlined a more disciplined approach to technology development, with “job number one is ramping Intel 18A at scale” for both Intel’s own products and select customers like the US government.

Looking ahead, the company is developing Intel 14A as a foundry node specifically for external customers, but with an important caveat. “Going forward, our investment in Intel 14A will be based on confirmed customer commitments,” Tan wrote, reinforcing his “no blank checks” philosophy.

The CEO has also instituted new oversight procedures, writing that “every major chip design is reviewed and approved by me before tape-out. This discipline will improve our execution and reduce development costs.”

AI strategy refinement

Beyond manufacturing changes, Tan outlined plans to revitalize Intel’s traditional x86 processor business and refine its AI strategy. In client computing, Tan said, “Panther Lake is our top priority as it will reinforce our strength in notebooks across consumer and enterprise,” while the company works on Nova Lake for high-end desktop markets.

For data centers, Intel is making a notable technical reversal by “reintroducing simultaneous multi-threading (SMT). Moving away from SMT put us at a competitive disadvantage. Bringing it back will help us close performance gaps.”

In AI, Tan signaled a strategic shift from traditional approaches, writing that “we will concentrate our efforts on areas we can disrupt and differentiate, like inference and agentic AI.”

Cost-cutting across the industry

Intel’s workforce reduction reflects broader trends across the technology sector, where companies continue implementing cost-cutting measures despite improving economic fundamentals. ComputerWorld’s 2025 tech layoffs timeline shows Intel among numerous tech companies reducing headcount this year, including Microsoft, Cisco, and AMD.

The company has also announced plans to implement a return-to-office policy in September, with “sites completing necessary improvements to operate at full capacity.”

Tan framed the restructuring as essential to cultural change at Intel. “We will become a faster, more agile, and more vibrant company. We will eliminate bureaucracy and empower engineers to innovate with greater speed and focus,” he wrote.

The CEO emphasized urgency in his closing remarks: “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.”

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