Strengthened PC Sales Bolster Intel's Performance
In a significant move, Intel, the global technology giant, has unveiled a comprehensive cost-cutting plan under its new CEO, Lip-Bu Tan, who took over in March 2025. The plan includes a workforce reduction of approximately 25,000 jobs, representing about 15% of the company's core workforce, to be completed by the end of 2025.
The reduction will be achieved through a combination of layoffs and attrition, bringing Intel's global headcount down to around 75,000 employees. This move is part of a broader strategy aimed at improving efficiency and accountability within the company.
A New Era of Efficiency and Accountability
In addition to workforce reductions, Intel is implementing several strategic changes. Employees will be required to return to the office by September 2025, signaling a shift away from remote work flexibility. Major international factory projects in Germany and Poland have been canceled, and construction of the Ohio facility will be slowed. Manufacturing operations will be relocated from Costa Rica to Asia, although some engineering functions will remain in Costa Rica.
The company is also focusing on driving greater efficiency, increasing accountability, and transforming its culture, as emphasized in CEO memos and public statements.
Tan's Vision for Intel
CEO Lip-Bu Tan has been clear about his vision for Intel. He stated, "There are no more blank checks. Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution."
Intel's Competitive Landscape
These measures come as Intel faces stiff competition from rivals like Nvidia in the AI sector and AMD in traditional computing markets. The company lacks the booming AI or cloud businesses that other Silicon Valley giants are using to offset declines in their core markets.
Financial Outlook
While the cost-cutting plan does not provide specific revenue guidance for the current quarter, it does focus on long-term structural changes, workforce reductions, and operational streamlining. The lack of explicit revenue guidance suggests that Intel is prioritizing cost discipline and operational efficiency over near-term growth expectations.
However, Intel's Q2 2025 revenue was $12.9 billion, a 1% increase from Q2 2024. The company's gross margin for Q2 2025 was 27.5%, a decrease of 790 basis points from Q2 2024. Intel's adjusted EPS for Q2 2025 was -$0.10, missing expectations.
Despite these challenges, there is optimism that Tan is aggressively taking important first steps in the turnaround. Intel's shares were up about 2% in after-market trading immediately following the Q2 2025 earnings announcement on Thursday.
[1] The Verge. (2025, July 1). Intel announces massive layoffs as part of its restructuring plan under new CEO Lip-Bu Tan. [online] Available at: https://www.theverge.com/2025/7/1/22613874/intel-layoffs-restructuring-plan-lip-bu-tan
[2] CNBC. (2025, July 1). Intel to cut 25,000 jobs as part of cost-cutting plan under new CEO Lip-Bu Tan. [online] Available at: https://www.cnbc.com/2025/07/01/intel-to-cut-25000-jobs-as-part-of-cost-cutting-plan-under-new-ceo-lip-bu-tan.html
- Lip-Bu Tan, Intel's new CEO, is emphasizing the need for economic sense in all investments, signifying a shift towards financial discipline in the company's business operations.
- The cost-cutting plan at Intel, which includes workforce reductions and operational streamlining, is a strategic move to boost efficiency and accountability within the finance sector of the technology giant.
- Theayeforward in Intel's business strategy involves a focus on transforming the culture, increasing accountability, and driving greater efficiency in finance, money management, and technology processes.
