Intel Layoffs 2025: Over 20% Workforce Cut
Intel plans to cut over 20% of its workforce in 2025 under new CEO Lip-Bu Tan, aiming to streamline operations and revamp AI strategy.
Santa Clara-based tech giant Intel is set to reduce its global workforce by more than 20% in 2025, marking a significant restructuring effort under new CEO Lip-Bu Tan. The layoffs, announced this week, aim to address inefficiencies and reposition the company in a competitive semiconductor market.
Lip-Bu Tan, who assumed the role of CEO last month, wasted no time outlining his vision for Intel’s revival. At a recent town hall, he emphasized the need for tough decisions to tackle a bloated middle management layer. Sources indicate that Tan views this layer as a barrier to innovation, slowing decision-making at a time when agility is critical.
Tan’s strategy focuses on flattening the leadership structure, with key chip groups now reporting directly to him. This move is part of a broader push to foster an engineering-driven culture, a shift from what employees describe as a slow and bureaucratic environment.
Why the Layoffs?
Intel’s challenges are multifaceted. The company reported a $19 billion loss in 2024, its first annual loss since 1986. Declining revenue, shrinking market share, and fierce competition from rivals like Nvidia and TSMC have put pressure on Intel to act decisively. The layoffs follow a previous reduction in August 2024, when Intel cut 15% of its workforce, approximately 15,000 jobs.
The semiconductor industry is undergoing rapid transformation, driven by the race to dominate artificial intelligence (AI). Intel’s AI strategy, once a cornerstone of its innovation, has lagged behind competitors. Tan aims to overhaul this, prioritizing investments in AI and manufacturing to regain a competitive edge.
Impact on Employees and Industry
The layoffs will affect over 20,000 employees globally, with cuts targeting middle management but also impacting other roles. Intel employed 108,900 people at the end of 2024, down from 124,800 the previous year. The reduction has sparked concern among workers, with some expressing fears about morale and the pace of ongoing projects like the 18A process node.
Industry analysts see Tan’s approach as a high-stakes gamble. While streamlining operations could improve efficiency, significant layoffs risk disrupting Intel’s talent pool. Competitors like Nvidia and Broadcom are reportedly eyeing Intel’s manufacturing advancements, suggesting early signs of progress under Tan’s leadership.
Economic and Market Context
Intel’s layoffs come amid broader economic uncertainty. Recent tariffs and recession fears have rattled markets, with tech companies facing pressure to cut costs. The semiconductor sector, in particular, is grappling with the unproven profitability of AI investments. Other firms, including Amazon and Salesforce, have also announced layoffs in 2025, reflecting a cautious approach to growth.
Despite the challenges, investors have responded positively to Tan’s appointment, with Intel’s stock rising over 15% after his announcement. His track record at Cadence Design Systems and deep industry connections lend credibility to his turnaround plan.
Intel’s immediate focus is on strengthening its Intel Foundry division, which manufactures chips for clients like Microsoft and Amazon. Tan is aggressively pursuing new customers to bolster this arm. The company also plans to sell and lease back portions of its real estate, such as its Folsom, California campus, to cut costs further.
For employees, the coming months will be uncertain. Tan has promised transparency, but the scale of the layoffs suggests a leaner Intel by 2026. As the company navigates these changes, its ability to balance cost-cutting with innovation will determine its place in the evolving tech landscape.
