Intel Corporation is undergoing a major transformation. In an effort to bounce back from years of slipping market share and missed opportunities, the once-dominant chipmaker is laying off thousands of workers and scaling back global operations.
CEO Lip-Bu Tan, who took the helm with a mandate to turn things around, announced that Intel will end the year with 75,000 core employees—down from 99,500 just a year ago. This 25% workforce reduction is part of what Tan calls “hard but necessary decisions” to boost efficiency, eliminate redundancy, and increase accountability at every level of the company.
The cuts won’t stop at staffing. Intel is also scrapping previously announced projects in Germany and Poland and relocating its assembly and test operations in Costa Rica to larger, lower-cost facilities in Vietnam and Malaysia. While Costa Rica will retain some corporate and engineering functions, it’s a clear sign of consolidation.
Back in the U.S., the semiconductor giant is slowing construction on its planned mega plant in Ohio—a project once touted as a symbol of America’s chip resurgence.
Intel’s financial results underscore the urgency. For Q2, the company posted a staggering $2.9 billion loss—nearly double the $1.6 billion loss from the same period last year. Revenue remained flat at $12.9 billion, despite rising demand for AI chips. Rival Nvidia, now worth over $4 trillion, has capitalized on the AI boom while Intel has struggled to catch up.
Founded in 1968 and long considered the pioneer of Silicon Valley, Intel has been hamstrung by years of missed transitions—from mobile computing to now AI. While other chipmakers seized early opportunities in the AI space, Intel is only now sharpening its focus on artificial intelligence and what Tan calls its “core product portfolio.”
“There are no more blank checks,” Tan told employees. “Every investment must make economic sense.”
Whether this leaner, more focused Intel can reclaim its leadership remains to be seen. But with mounting losses and fierce competition, the clock is ticking.