Intel Announces 15-20% Workforce Reduction and Factory Plan Cancellations Amid Strategic Shift

Intel Corporation announced its second quarter 2025 financial results, surpassing revenue expectations. Despite this strong revenue performance, CEO Pat Gelsinger announced significant strategic changes including a 15% reduction of the company's workforce and the cancellation of certain factory plans. The CEO emphasized a shift in investment approach by stating 'no more blank checks,' signaling tighter capital discipline. These adjustments come as Intel seeks to manage costs and recalibrate its investments in foundries.

In the second quarter, Intel surpassed revenue expectations, driven by a rebound in PC demand, leading to a rise in its stock price. Despite this positive sales forecast, CEO Pat Gelsinger declared a shift away from unrestricted spending, stating there will be "no more blank checks." The company plans a 15% reduction in its workforce as part of a broader turnaround strategy. Additionally, Intel is reducing capital expenditures for next year and slashing foundry investments. As part of the restructuring, Intel will abandon certain European manufacturing sites. These measures reflect Intel's efforts to optimize costs and refocus its investment approach amid changing market conditions. The financial details and exact timing were not fully disclosed, but the firm indicated a more cautious investment outlook moving forward.

Intel Corporation (INTC) is implementing a major workforce reduction, planning to lay off between 15% to 20% of its factory workers, which translates to more than 10,000 employees. This layoff is part of CEO Speaker Tan's turnaround strategy aimed at lowering the company's expenses and preparing Intel for the AI era. The layoffs are scheduled ahead of July 2025. According to internal memos, none of the laid-off employees will receive severance payments. The move aligns with Intel's efforts to reposition itself in a competitive semiconductor market influenced by emerging AI technologies. Despite these cuts, Intel's stock has shown positive momentum and is forming bullish chart patterns, such as the cup-and-handle and golden cross, indicating potential improvement in market sentiment.

Over the past year, Intel Corporation (NASDAQ: INTC) has experienced a significant 35% decline in its stock price, triggering widespread investor concern about the company's future prospects. Key developments have unfolded under the leadership of Intel's new CEO, Tan, who is charting a path aimed at reclaiming the company's dominance in the semiconductor industry. Tan is reportedly exploring major strategic shifts in Intel's chip manufacturing operations, including reconsideration or potential scrapping of the company's advanced 18A lithography technology in favor of alternatives such as 14A. This move is seen as a dual gamble: focusing now on AI innovation to regain competitive edge while delaying or pivoting foundry investments.

Reports indicate Intel may alter plans for its Ohio manufacturing plant amidst increasing pressure from rivals like Taiwan Semiconductor Manufacturing Company (TSMC). These shifts stem from challenges in executing 18A technology, which could risk billions of dollars in investments and market position. Wall Street analysts and investors are divided; some see this painful phase as a potential buying opportunity, while others question Intel’s ability to recover swiftly.

Intel is also navigating geopolitical difficulties, with shares tumbling in response to sweeping tariffs and AI chip export curbs. Meanwhile, Intel is aggressively pursuing new business avenues, including rumored billion-dollar bids for major customers such as Apple and Nvidia.

The company faces a crucial decision point as its leadership weighs whether to abandon its self-developed 18A process for external customers and possibly outsource more manufacturing, a strategy shift that could reshape its role in the global chip market. Investor sentiment remains mixed, with some urging to "grab the bull by the horns" and bet on Intel's turnaround set for 2025, as the firm pivots towards AI-fueled growth and attempts to rewire its destiny amid intense competition and manufacturing uncertainties.