Intel restructuring in 2025 will impact 24,000 jobs. Discover 5 key facts about the layoffs and cost-cutting strategy led by the company’s new CEO.
This year, Intel, one of the biggest semiconductor companies in the world, plans to lay off around 24,000 workers, or more than a quarter of its staff (25%). Under the direction of its new CEO, Lip-Bu Tan, the company has announced significant cost reductions and restructuring. In an effort to enhance its position in the market and improve its financial status, Intel has also cancelled its crucial expansion projects in Germany and Poland. Intel employed 99,500 people in total by the end of 2024. However, this number will drop to 75,000 by the end of 2025 as a result of the layoffs.
The managerial levels were cut in half.
CEO Tan wrote a letter to staff members outlining the company’s choice as both difficult and essential. This year’s second quarter saw the corporation cut management ranks in half and record restructuring costs of $1.9 billion, or ₹16,450 crore.
Intel Closes Its Test and Assembly Facility
Intel has cancelled plans for a 3,000-person mega-fab in Germany and a 2,000-person assembly and testing plant in Poland. Prior to 2024, these projects had already been delayed by two years.
Additionally, this layoff will impact almost 2,000 of Intel’s 3,400 Costa Rican employees. This is a result of the company moving its testing and assembly facilities to Malaysia and Vietnam.
By 2030, an Ohio chip factory will be finished.
Due to market demand, the company’s $28 billion (₹2.42 lakh crore) chip facility in Ohio, USA, which was originally scheduled to be finished by 2025, will now be developed more slowly and won’t be finished until beyond 2030.
In a few years, the corporation made more investments than were needed.
The CHIPS Act of the Biden administration provided financing for this endeavour. “Our factories are dispersed and underutilised as a result of the company’s excessive investments in the last few years without demand,” Tan remarked.
Intel reported a ₹25,107 crore loss.
Intel recently reported its largest loss period in the last 35 years, with a quarterly loss of $2.9 billion, or ₹25,107 crore, on revenue of $12.9 billion, or ₹1.12 lakh crore. Intel, which was once a powerhouse in PC chips, is now trailing rivals like Nvidia and AMD in the field of artificial intelligence (AI).
June saw the closure of the car chip manufacturing facility.
In June, Intel closed its automotive chip division, and in July, it separated the RealSense computer vision division. Beginning in September, the organisation will enforce a return-to-office policy. These actions are being taken to alter the company’s culture, according to Tan.
Encouraging Innovation in Engineers
“We will enable engineers to innovate swiftly and invest to increase market share in AI chips and PC processors by lowering costs,” Tan informed staff. We cannot afford to waste time because we hold the key to Intel’s future.
This is an important step in Intel’s goal to stabilise the company’s finances and re-establish its market position. It might, however, turn out to be a difficult time for workers and impacted industries.
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