Intel is undergoing its most sweeping workforce restructuring in nearly four decades, announcing plans to reduce its global headcount from 99,500 to 75,000. This 24% workforce reduction, impacting nearly one in four employees, is part of CEO Lip-Bu Tan’s aggressive effort to stabilize Intel’s financials and reposition the company in the AI and foundry era.
The layoffs span across engineering, manufacturing, and support teams, and are closely tied to Intel’s roadmap pivot away from its 18A process node toward 14A. Facilities in Costa Rica, Germany, and Poland are either being downsized or de-prioritized, and Intel’s flagship Ohio mega-fab project is being slowed, as capital expenditures and staffing plans are realigned to new strategic goals. Tan, who took over the CEO role in March 2025, is pushing for leaner operations, faster decision-making, and centralized control over chip design reviews, which are now routed through the executive leadership team.
Intel has not made clear exactly how many roles will be cut in each geography, but industry sources suggest that Europe and the Americas will face the deepest reductions, especially in divisions tied to the winding down of 18A as a commercial foundry process. The job cuts are expected to be completed in waves between Q3 2025 and early 2026.
Financials Reflect Restructuring Pain
The job cuts come in the context of a brutal Q2 2025, in which Intel posted a GAAP net loss of $2.9 billion. Of that, $1.9 billion was attributed to restructuring costs, including severance packages, site closures, and asset impairments. Intel’s non-GAAP EPS of –$0.10 missed expectations, and its Q3 guidance suggests only a break-even result at best.
Intel’s $18 billion CapEx for 2025 remains unchanged, but Tan has promised that operating expenses will decline from $17 billion in 2025 to $16 billion in 2026, partially through headcount reductions and reorganization.
Roadmap Shifts Underpin Workforce Changes
At the heart of the restructuring is Intel’s decision to pull back from its 18A node for external foundry clients. Tan is refocusing resources on 14A, a cleaner, more competitive process node targeting 2026 ramp-up. This pivot affects talent allocation significantly: teams originally tasked with enabling 18A for foundry clients are being dissolved or reassigned, while new hiring is paused until 14A staffing plans are finalized.
Despite 18A’s sunset as a foundry node, Intel will still use it for internal chips like Panther Lake, which remains on track to ramp in late 2025. These internal programs may preserve some jobs, but not enough to offset broader redundancies.
Segment Performance Reveals Strategic Priorities
While the layoffs affect every business unit to some degree, Intel’s segment performance points to which areas are likely to see deeper cuts. The Client Computing Group, down 3% to $7.9 billion, is underperforming, driven by soft consumer PC demand. In contrast, Data Center and AI revenue grew 4%, and foundry services were up 3%, showing growth potential.
Intel is expected to allocate more resources to AI and server-grade chip divisions, which means job protection (and potential expansion) in those high-performing units, even as others are downsized.
Leadership Reforms Reinforce Workforce Streamlining
Lip-Bu Tan is not simply trimming costs, he’s rebuilding Intel’s culture. The CEO has already brought in new engineering talent and streamlined Intel’s bloated middle management. A key new policy mandates that all chip designs undergo executive-level review before reaching tape-out, increasing accountability and trimming unnecessary design cycles. This initiative is helping Intel eliminate overlapping teams and reassign roles with clearer focus.
Tan’s leadership is also being seen as a shift from Pat Gelsinger’s multi-node investment spree to a customer-driven and efficiency-first strategy. The workforce overhaul is a direct extension of that pivot.
Market Context: Cutting to Compete
Intel’s layoffs come at a time when the chip industry is expanding globally, but becoming more competitive. TSMC and Samsung continue to attract Apple and Nvidia with next-gen nodes and proven reliability. Meanwhile, Intel has struggled to regain foundry credibility.
Analysts believe these job cuts were inevitable if Intel hopes to return to sustainable margins. However, there is also concern about brain drain, particularly if displaced engineers are poached by rival fabs or startups.
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