Intel is laying off thousands of workers and canceling major global projects as it struggles to catch up in the booming artificial intelligence (AI) chip race.
The move comes as new CEO Lip-Bu Tan pushes a major turnaround plan for the once-dominant chipmaker.
In a memo to staff on Thursday, Tan said Intel plans to cut its "core" workforce from 99,500 to about 75,000 by the end of 2025.
That number excludes employees at subsidiaries like Mobileye. According to CNN, the company previously announced plans to cut 15% of staff, or about 15,000 jobs, in a $10 billion cost-saving effort.
"I know the past few months have not been easy," Tan wrote. "We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level."
Intel also announced it will scrap previously planned projects in Germany and Poland. Its assembly and test operations in Costa Rica will move to larger sites in Malaysia and Vietnam. However, Intel said Costa Rica will still host important engineering and corporate teams.
In the US, construction of a semiconductor plant in Ohio will slow down. Intel said the delay is meant to align spending with market demand.
Intel to Lay Off 15% of Workers, Cancel Billions in Projects in Bid for Rebound https://t.co/B0LqLeJppG pic.twitter.com/Gj3bqZwk9A
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Intel Posts $2.9B Loss as Rivals Surge Ahead
Once a leader in the chip industry, Intel has lost ground to rivals like Nvidia and AMD.
Nvidia, which now dominates the AI chip market, recently reached a market value of over $4 trillion. By comparison, Intel's market cap sits under $100 billion.
Intel missed major tech shifts like mobile computing and AI in recent years. As AI exploded in demand, Nvidia's chips became the go-to choice for companies building smart apps and tools. Intel, meanwhile, struggled to keep up.
For the second quarter of 2025, Intel reported a net loss of $2.9 billion, nearly double its loss from the same time last year.. Revenue remained flat at $12.9 billion, AP News said,
Analysts had expected earnings of 1 cent per share, but Intel posted a loss of 10 cents per share, excluding one-time items.
"There are no more blank checks," Tan said. "Every investment must make economic sense."
Despite the rough numbers, Intel shares rose 3% in after-hours trading. The stock is up about 12% this year, showing some investor confidence in Tan's plan.
"It's going to take time," Tan said, "but we see clear opportunities to improve our position, boost profitability, and build long-term value."
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