Intel Announces Workforce Reductions and Revised Financial Outlook
On Thursday, Intel disclosed plans to reduce its workforce to 75,000 by year-end, a significant drop from 99,500 at the close of 2024.
The Santa Clara, California-based semiconductor giant shared these layoff projections while anticipating a more pronounced third-quarter loss than what analysts had projected, despite some expecting increased sales as new CEO Lip Butane steers the company through a challenging transition.
This news comes as Intel’s stock has risen 14% this year, driven by investor optimism that the company can recover from its past strategic missteps and leverage opportunities in the AI sector, currently dominated by Nvidia.
The company forecast a loss of 24 cents per share—worse than the predicted 24 cents—according to LSEG data. For the September quarter, Intel anticipates revenues between $12.6 billion and $13.6 billion, with a midpoint of $12.655 billion, surpassing earlier expectations of about $13.1 billion.
Analysts have expressed uncertainty about growth in the PC market, especially after some clients accelerated shipments earlier this year amid ongoing trade discussions. Data from the International Data Corporation noted a 6.5% rise in PC shipments in the June quarter.
While semiconductors are now exempt from President Trump’s global tariffs, Intel and other chipmakers still face a hesitant customer base, wary of making commitments due to broader economic uncertainties.
In the second quarter, Intel’s revenues remained stagnant at $12.9 billion, marking a continuation of declining sales over four quarters—falling short of the estimated $119.2 billion.
CEO Tan is prioritizing advancements in the next-gen chip manufacturing process known as 14A, moving away from the previous 18A technology, which had garnered significant external interest under former CEO Pat Gelsinger.
Additionally, Tan is working on streamlining operations and cutting down the workforce. Back in April, Intel had agreed to divest a 51% stake in its Altera Programmable Chip branch for approximately $4.46 billion.
The company noted that the job reductions in the second quarter resulted in $1.9 billion in restructuring costs.
When adjusted, losses for the June quarter amounted to a loss of 10 cents per share, far worse than the estimated earnings of 1 cent per share. Unadjusted, the net loss was reported at 67 cents per share, significantly exceeding analysts’ predictions of a 26-cent loss.
