Intel to Cut 24,000 Jobs in 2025, Cancel Major Factory Projects in Global Restructuring Push

by Shan 2025-07-25 09:26:50

Intel Corporation has announced one of the most significant restructurings in its 56-year history, confirming it will lay off approximately 24,000 employees—nearly a quarter of its global workforce—amid a strategic pivot away from large-scale chip factory expansions in Europe and Central America.

The layoffs come alongside the cancellation of factory projects in Germany, Poland, and Costa Rica, signaling a major retreat from Intel’s previous capital-heavy global manufacturing strategy.

Cost Cuts, Refocus on AI Core: CEO Lip-Bu Tan’s New Direction

In his first major move since taking the helm in early 2025, Intel CEO Lip-Bu Tan said the company will prioritize “only building what people actually need,” rather than pursuing speculative chip plant investments.

“I don’t believe in building things and hoping customers will show up,” Tan told investors during Intel’s Q2 earnings call.

Intel’s Q2 2025 report showed a $2.9 billion net loss, despite generating $12.9 billion in revenue. The company is also allocating nearly $2 billion for severance, facility shutdowns, and other restructuring expenses.

Global Footprint Shrinks: Germany, Poland, Costa Rica Projects Halted

Intel confirmed the suspension of planned semiconductor fabs in Germany and Poland, both of which were expected to create thousands of jobs and support the EU’s ambition to increase chip sovereignty. In Costa Rica, around 2,000 roles will be affected, as Intel shifts some operations to Vietnam.

Location	Status	Impact
Germany	Factory cancelled	Loss of up to 10,000 expected jobs
Poland	Packaging plant shelved	Halted EU chip investment
Costa Rica	Operations scaled down	2,000+ roles affected, some work moved to Vietnam

Tan Replaces Gelsinger’s “Fabs Everywhere” Strategy
The restructuring marks a clear departure from the direction taken by former CEO Pat Gelsinger, who spearheaded Intel’s “IDM 2.0” plan—an aggressive expansion into global chip manufacturing meant to rival TSMC and Samsung Foundry.
Tan’s approach, instead, reflects a shift toward:
Profit-driven manufacturing decisions

AI product leadership over physical expansion

Lean operational strategy

The new CEO has also committed to personally reviewing all future chip designs—a move intended to reduce misfires and ensure product-market fit in Intel’s next-gen releases.
AI Focus Intensifies Amid Competitive Pressure
Intel’s pivot comes at a time when Nvidia dominates the AI hardware market and AMD continues to gain ground in both consumer and enterprise chips. With PC chip sales soft and AI demand rising, Intel is under pressure to deliver competitive AI-ready processors by early 2026.
Industry analysts say Intel’s restructuring is aimed at consolidating resources to accelerate its AI chip roadmap, which is expected to include:
New laptop chips in late 2025

Enterprise-grade AI processors in early 2026

A refined hybrid manufacturing strategy later this year

Market Reaction: Mixed Sentiment Among Investors
Intel’s stock fell nearly 6% in early trading Friday following the announcement. While some investors welcomed the cost-cutting plan as a necessary correction, others raised concerns over execution risk and market share erosion.
Goldman Sachs analyst note: “The move signals discipline but underscores how far behind Intel is in AI and foundry competitiveness.”
TechInsider editorial: “This is Intel’s biggest gamble in years—fewer factories, fewer people, but hopefully better chips.”

Financial Snapshot: Q2 2025
Metric
Value
Revenue
$12.9 billion
Net Loss
$2.9 billion
Restructuring Cost
~$2 billion
Employees Laid Off
~24,000
Intel’s data center and cloud business showed slight growth, but PC chip demand continues to drag down overall performance.

What’s Next: More Changes Ahead
Intel executives indicated that more restructuring announcements could follow. Leadership changes are already underway in its data center division, and a new go-to-market strategy is expected to be detailed in Q3.
Upcoming Milestones:
Q3 2025: Data center unit leadership reshuffle

Q4 2025: New laptop and AI chips launch

Early 2026: Full-scale fab strategy update

Industry Context: Intel’s Global Standing
Intel's pullback from factory building comes as TSMC, Samsung, and GlobalFoundries continue expanding capacity. Meanwhile, Nvidia and AMD have doubled down on fabless strategies—partnering with foundries rather than building their own.
The restructuring raises questions about Intel’s ability to:
Regain market share in AI chips

Execute in a leaner operational model

Maintain relevance in a rapidly consolidating global semiconductor market

Analyst Insight
Priya Malhotra, ChipMarketWatch:
“Intel is no longer betting on massive infrastructure—it’s betting on agility. But execution is everything. If its AI chips underperform, the layoffs and cost cuts may not be enough.”
Intel’s decision to cut 24,000 jobs and halt multi-country factory expansions signals a deep strategic reset under new leadership. The company is consolidating, cutting costs, and redirecting its focus toward AI chip development and demand-led manufacturing.
As Tan steers Intel through turbulent waters, the chip giant faces a defining moment: become leaner and faster—or fall further behind in the race to power the AI-driven future.