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After months of speculation, Intel has confirmed it is eliminating thousands of jobs in mass layoffs this year.
The company planned to trim 15% of its global workforce last quarter and, in its latest earnings report, has confirmed that a majority of those cuts have already been initiated. Some of those cuts have reportedly impacted workers at Folsom and Santa Clara units in California, as well as Hillsboro and Aloha in Oregon. Other impacted sites include Arizona, Texas, and Israel.
Intel isn't stopping there. By the end of this year, it hopes to have only 75,000 core employees. According to The Verge, the company had 99,500 core employees at the end of 2024, which means it will have reduced its headcount by one-fourth or nearly 24,500 people by the end of this year.
Over the last few years, Intel has lost market share to rivals like TSMC and has struggled to develop products that meet the demands of the AI industry. Last year, it cut 15,000 jobs.
"These changes are designed to create a faster-moving, flatter and more agile organization," Intel says.
While the restructuring alone will cost Intel $1.9 billion, the company is taking a few other measures to reduce overall expenses. It will be pulling the plug on planned projects in Germany and Poland, shift assembly and test operations from Costa Rica to larger sites in Vietnam and Malaysia, and slow down the construction of its $28 billion chip production factory in Ohio.
Despite these setbacks, newly appointed CEO Lip-Bu Tan remains positive about a turnaround and stated that these actions are necessary to become more financially disciplined.
"Our operating performance demonstrates the initial progress we are making to improve our execution and drive greater efficiency," Tan said. "We are laser-focused on strengthening our core product portfolio and our AI roadmap to better serve customers… 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."
Editors' Note: An earlier version of this article misstated the ratio of job cuts as one-third instead of one-fourth.