Intel cuts 15% of its staff as it pushes to make a comeback

On Thursday, Intel announced it has largely completed its plan to reduce its workforce by 15%, a strategic move aimed at revitalizing the struggling chipmaker. This decision, revealed in the company’s second quarter earnings report, is among the first major actions taken by new CEO Lip-Bu Tan, who assumed the role in March. In a press release accompanying the earnings results, Tan expressed optimism about Intel's future, stating, "It’s going to take time, but we see clear opportunities to enhance our competitive position, improve our profitability, and create long-term shareholder value." Following this announcement, Intel shares (INTC) experienced a 3% increase in after-hours trading, despite the company reporting a substantial net loss of $2.9 billion for the quarter, nearly double the losses from the same period the previous year. Since the beginning of the year, Intel's stock has risen nearly 12%, indicating that investor confidence in Tan's leadership remains strong, even amid uncertainty about the company's long-term prospects. The workforce reduction aims to foster a more nimble and efficient organization, with Intel stating its goal of reducing its core workforce to 75,000 employees by the end of 2025, excluding its subsidiaries, which currently employ around 108,900 staff members. Earlier this month, Intel filed a layoff notice in Oregon, signaling plans to cut nearly 2,400 positions, although it remains unclear if these layoffs are included in the 15% reduction. Additionally, the company is halting projects in Germany and Poland as part of broader cost-saving measures and is slowing down construction of its chip factories in Ohio to better align spending with market demand. Intel has faced several challenging years as it struggled to keep pace with competitors, particularly after missing critical shifts in technology trends such as mobile devices and artificial intelligence. In stark contrast, rival Nvidia's market capitalization recently surpassed $4 trillion, marking it as the first publicly traded company to reach this milestone. Last summer, Intel announced its intention to cut 15,000 jobs as part of a $10 billion initiative to reduce costs and better compete in the AI chip market. The trend of layoffs isn't isolated to Intel; other tech giants, including Microsoft and Meta, have also made significant cuts to their workforces this year.