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Intel says a fifth of its workforce will be gone by year’s end [1]

['Mike Rogoway', 'Mrogoway Oregonian.Com', 'The Oregonian Oregonlive']

Date: 2025-07-24 20:58:02.539000+00:00

A prominent investment analyst warned Intel may be cutting too deep, eliminating "pivotal" resources in the name of short-term profits. Intel photo

Intel put a number to its ongoing layoffs for the first time Thursday, indicating that it’s in the final stages of eliminating more than 15,000 jobs across the company.

It’s also dramatically scaling back its manufacturing operation, called Intel Foundry, by scrapping plans to spend billions on new factories in Europe and closing another in Costa Rica.

Intel warned it might give up on advanced manufacturing completely if it doesn’t find major outside clients to use its factories in the next four years.

“I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company,” CEO Lip-Bu Tan wrote in a note to employees in conjunction with Intel’s second-quarter financial release.

Intel had about 96,000 employees around the world at the end of June. Job cuts that began this summer will reduce Intel’s workforce by 15% and are mostly complete, the company said. Intel said it plans to end the year with about 75,000 workers, after anticipated attrition from within the remaining workforce and the pending sale of its Altera programmable chip business.

That will leave Intel’s workforce 22% smaller than it was at the end of June.

The company also said it’s abandoning plans for new factories in Germany and Poland and will close an assembly site in Costa Rica, moving that facility’s work to larger plants in Vietnam and Malaysia.

Intel said it will again delay plans for factories in Ohio, the first of which was once due to open this year. Previously, Intel pushed the opening date back to 2030. It didn’t say Thursday how much later it now expects to open.

“Unfortunately, the (manufacturing) capacity investment we made over the last several years were well ahead of demand and were unwise and excessive,” Tan told Wall Street analysts Thursday. “Our factory footprint has become needlessly fragmented.”

Second-quarter sales totaled $12.9 billion, flat from a year ago, according to Thursday’s results. The company reported a $2.9 billion loss, including $1.9 billion in restructuring charges and $800 million in write-offs.

Intel indicated it expects little improvement in the current quarter, forecasting sales of about $13 billion. That would be a 1.4% decline from last year.

The company has disclosed 2,400 layoffs in Oregon this month and at least 1,600 at other U.S. sites. But that tally may not be comprehensive because federal disclosure regulations do not cover all kinds of job cuts.

Oregon remains Intel’s largest site anywhere in the world, but its local workforce appears at its lowest point in a decade at approximately 17,600 following this summer’s layoffs.

Intel is trying to recover from years of technical and financial missteps. It is losing market share in PCs and data centers, has no advanced artificial intelligence chips and is a step behind in manufacturing technology.

This summer’s layoffs are making Intel leaner and more cost effective but already, Tan has alienated many employees. Intel’s internal message board has lit up this week with questions about how Intel will rebuild morale and retain workers. Employees continue to post complaints about Tan’s mandate that workers return to the office at least four days a week.

Intel employees were already reeling from job cuts last year, which eliminated 15,000 jobs worldwide.

Wall Street is also growing uneasy about Tan’s plans. Intel’s stock fell 4% in late trading Thursday, to $21.72, after the company reported financial results. That added to a 3.7% decline during regular trading hours.

Intel appears to be prioritizing short-term profitability over its long-term future, Bank of America analyst Vivek Arya wrote in a note to clients ahead of Thursday’s earnings release. He warned that Tan’s job and spending cuts could backfire.

“While these measures could bring (a) semblance of profit in the near-term, we raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products (and manufacturing) nodes,” Arya wrote.

Those, he said, are “pivotal” to Intel’s long-term position in the semiconductor market.

Since Intel hired Tan in March, he has made it clear that he believes the chipmaker is too bureaucratic. He has pledged to reduce layers of management and cut jobs. Tan said Thursday he will focus on making a forthcoming manufacturing node, called 14A, more useful to other chip companies who are considering hiring Intel to make their own semiconductors.

And Tan said each major new chip design will require him to sign off personally.

“Going forward, our investment in Intel 14A will be based on confirmed customer commitments,” Tan told employees Thursday. “There are no more blank checks. Every investment must make economic sense.”

Before Intel hired Tan, the company had floated the possibility of breaking up the business and selling off its factory network. Intel appears to be considering that option more seriously.

In a regulatory filing Thursday, Intel said it might give up advanced manufacturing altogether if outside chip companies don’t hire Intel to use its 14A process to make their chips.

Intel said Thursday it expects to launch 14A in 2028 or 2029. Tan said the company is designing the technology to appeal to potential manufacturing clients, and Intel said the stakes are very high.

“If we are unable to secure a significant external foundry customer for Intel 14A, our next generation semiconductor manufacturing process technology, we may pause or discontinue our pursuit of next generation leading-edge process technologies,” Intel wrote in its quarterly filing.

That would be a seismic shift. Intel noted — in a profound understatement — that giving up advanced manufacturing “may have significant strategic business, financial, operational and reputational risks and repercussions.”

Update: This article has been updated to clarify the scale of Intel’s job reduction and how the company plans to achieve it.

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[1] Url: https://www.oregonlive.com/silicon-forest/2025/07/intel-says-a-fifth-of-its-workforce-will-be-gone-by-years-end.html

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