Intel, one of the most established companies in the semiconductor industry, is undertaking one of the largest downsizing steps in its history. The company will lay off 24,000 employees by the end of 2025. This significant workforce reduction comes alongside the cancellation of projects in Germany, Poland, and Costa Rica. The decision demonstrates that Intel is fundamentally shifting its manufacturing and investment strategy as it transitions to a new era focused on artificial intelligence.
Intel is conducting mass layoffs
Intel, which had 109,800 employees globally by the end of 2024, will reduce this number to 75,000 by the end of 2025. This staffing structure, described as “core” in internal company documents, means the layoff of approximately 22 percent of the total staff. This downsizing isn’t limited to human resources alone; Intel is also withdrawing its physical presence in some regions.
The company’s planned mega-chip factories and test facilities in Germany and Poland have been canceled. These facilities were expected to employ a total of 5,000 people. Intel announced last year that it was postponing these projects.
However, the latest statement clarified that these plans have been completely canceled. Existing R&D activities in Poland will continue. Assembly and test operations in Costa Rica, which employ 3,400 people, are being closed. These operations are being relocated to a larger facility in Vietnam.
CEO Lip-Bu Tan sharply, if not explicitly, criticized previous management regarding the current strategic transformation process. He stated that the company had overinvested in previous periods before demand was generated and had unnecessarily complicated manufacturing processes. Production capacity in the new period will be determined by actual demand. Tan announced that from now on, every new chip design developed at Intel will undergo direct approval from him.
The company reported a loss of $2.9 billion in its second-quarter financial report. Revenue remained at $12.9 billion, unchanged from the same period last year. Data center revenue increased by 4 percent to $3.9 billion during this period, while PC chip sales declined by 3 percent to $7.9 billion. Foundry production for other companies increased by 3 percent, reaching $4.4 billion.
Intel plans to achieve total cost savings of $17 billion by the end of 2025. The company announced that it will release its next-generation Panther Lake chips by the end of this year, followed by the Nova Lake series in late 2026. CEO Tan stated that past mistakes regarding multi-core performance will not be repeated and that he is now directly responsible for the technical decisions in this area.
