In a decision that highlights the intensifying crisis for traditional tech companies in the face of revolutionary transformation in the semiconductor sector, Intel announced it will cut 30,000 jobs within the next three years through to 2025. The reduction in workers — a little over 28% of its core workforce — is part of a significant overhaul designed to lower costs of operation and regain its competitive position in an industry that has shifted dramatically towards mobile computing and artificial intelligence (AI).
The layoffs were announced with Intel’s second-quarter earnings, when the company outlined the complete scope of its turnaround plan. Intel had about 108,900 employees at the close of 2024. It wants to reduce that count to about 75,000 by December 2025. The numbers don’t include workers on the payrolls of Intel’s subsidiaries, like Mobileye, the self-driving car division.
The restructuring efforts are being spearheaded by newly installed CEO Lip-Bu Tan, who replaced Pat Gelsinger in March 2025 after a volatile stretch featuring eroding market share, behind-schedule product roadmaps, and mounting investor pressure. Tan, a veteran semiconductor executive and ex-Cadence Design Systems CEO, has indicated that winning back Intel’s relevance in the AI age is his number one goal.
“A Flatter, Faster Intel”
Intel has indicated the reductions will be accomplished through a mix of voluntary departures, layoffs, and natural attrition. In announcing the moves, the company highlighted its desire to have a “faster-moving, flatter and more agile organization” that will be able to react rapidly to changes in the marketplace and cycles of innovation. While most of the layoffs are said to have occurred, inside sources indicate more restructuring is planned in the coming months, including in non-core businesses and administrative positions.
We are taking challenging but essential actions,” said Tan on the call. “Intel needs to work more efficiently and intently if it is to reassert its leadership. It will take time, but we have distinct opportunities to strengthen our competitive position, increase profitability, and build long-term shareholder value.”
Expansion Plans on Hold
On top of the seriousness of the announcement, Intel also suspended a number of prospective expansion projects, such as a multibillion-dollar chip factory in Ohio and an R&D facility in Israel. The projects were previously lined up as key pieces of Intel’s Foundry Services strategy to compete with Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung in the profitable chip-making business.
Industry analysts claim the cancellation of these projects indicates a major step back from Intel’s aggressive vision to become the world’s second-largest contract chip manufacturer by 2030 — a target set by former CEO Gelsinger. “Intel overextended itself,” says Rajeev Mehta, an analyst with Bernstein Research. “They attempted to catch up too quickly with TSMC and Nvidia, without addressing core inefficiencies. Now they’re in reset mode.”
Lagging Behind in AI and Mobile
Intel’s current woes are a result of its failure to keep up with two of the most revolutionary trends in computing: mobile processors and artificial intelligence chips. While Intel had more than a half-century’s worth of dominance in the PC and server spaces, it did not meaningfully move into the smartphone processor space — losing ground to Qualcomm, Apple, and MediaTek.
More recently, however, as the generative AI phenomenon has revolutionized the computing environment, Intel again found itself relegated to the sidelines. Nvidia stepped forward, becoming the world’s largest most valuable semiconductor manufacturer based on its high-performance GPUs, which drive everything from training AI models to self-driving cars.
Conversely, Intel’s AI chip products, such as its Gaudi accelerators and CPUs with built-in AI capabilities, have met with tepid acceptance. Rivals such as AMD have also nibbled into Intel’s server business share, especially in the data center space, where parallel processing and power efficiency reign supreme.
Global Layoff Wave in Tech
Intel’s move adds to the broader wave of layoffs sweeping through the global technology sector in 2025, as companies adjust to economic uncertainty, over-hiring during the pandemic years, and the disruptive impact of AI. Major firms like Microsoft, Meta, Amazon, and Google have all trimmed their workforces this year. Microsoft, for example, laid off over 9,000 employees — its largest cut since 2023.
For Intel, the problem is existentially singular. Unlike cloud-first companies or AI-native startups, Intel’s core business is still deeply rooted in old architectures and hardware supply chains. To reboot its innovation engine, it will take more than cost-cutting, however. It will take a radical rethinking of its product strategy, talent pool, and go-to-market strategy.
What’s Next for Intel?
The firm indicates it will concentrate more intensely on four main areas: AI accelerators, manufacturing of advanced process nodes, power-efficient server chips, and software-defined silicon. It intends to double down on partnerships as well, including closer working with ecosystem players like Microsoft, Google Cloud, and AI startups looking for alternatives to Nvidia.
Analysts are guardedly optimistic. “This restructuring was long overdue,” says Ananya Desai, a technology strategist at IDC. “If Tan can make a clear product roadmap and implement quickly, Intel has the money, the brand, and the geopolitical backing to make a comeback. But the window is short.”
For the time being, tens of thousands of Intel workers will be preparing for a rocky second half of the year, and the rest of the tech industry will be watching with interest as one of the industry’s longest-established behemoths attempts to reinvent itself yet again — in a world it helped create, but now struggles to remain relevant in.
