Intel to Announce Over 20% Job Cuts This Week: The Chipmaker’s Restructuring Strategy 2025

Over 20% Job Cuts: Intel Corporation, a leading name in the semiconductor industry, is reportedly on the verge of announcing a significant workforce reduction, slashing over 20% of its employees—more than 21,000 jobs—this week.

This development, initially reported by Bloomberg, marks the largest layoff in Intel’s history and comes as part of a sweeping restructuring effort led by new CEO Lip-Bu Tan, who assumed leadership in March 2025.

As Intel battles financial challenges, a competitive AI chip market, and operational inefficiencies, this move aims to reposition the company for future growth. In this expanded news article, we delve deeper into the reasons for these cuts, their broader implications, Intel’s strategic shifts, and the tech industry landscape in 2025, ensuring you have a comprehensive understanding of this pivotal moment.

Why Intel Is Announcing Over 20% Job Cuts This Week

Intel’s decision to reduce its workforce by over 20%, affecting more than 21,000 employees, is driven by a combination of financial pressures and strategic realignment. At the end of 2024, Intel employed 108,900 people, a figure already down from 124,800 the previous year due to earlier layoffs.

The company has been grappling with high operational costs, declining margins in its traditional PC and data center businesses, and an expensive shift toward AI chip development, where it lags behind Nvidia. Under CEO Lip-Bu Tan, Intel is targeting bureaucratic inefficiencies, particularly in middle management, to streamline decision-making and foster an engineering-driven culture.

This move is part of a broader effort to cut costs, improve agility, and refocus on core competencies like chip innovation and manufacturing, with the announcement expected alongside Intel’s Q1 2025 earnings call on April 24. [Source: Bloomberg via TechCrunch, Business Standard]

Detailed Background on Intel’s Recent Struggles

Intel’s challenges have been mounting over the past few years. In 2023, the company employed 131,900 people, but by the end of 2024, that number had dropped to 108,900 after two rounds of layoffs: one in 2023 cutting 15,000 jobs and another in August 2024 slashing 15% of its workforce, roughly 15,000 positions.

These reductions were part of a $10 billion cost-saving initiative announced in 2024, reflecting Intel’s struggle to maintain profitability amid shrinking margins. The company has also faced delays in its manufacturing roadmap, losing ground to TSMC in advanced chip production.

In the AI chip market, Intel trails Nvidia, which has capitalized on the AI boom with its GPUs. Additionally, Intel’s ambitions to expand its foundry business have hit roadblocks, with a potential TSMC partnership fading and uncertainty around funding from the 2022 Chips and Science Act under the Trump administration’s policies. These factors have necessitated a drastic overhaul to regain competitiveness. [Source: Business Standard, WCCFTech]

Leadership Transition and Strategic Overhaul

Lip-Bu Tan’s appointment as CEO in March 2025 marked a turning point for Intel. Tan, who previously served on Intel’s board, had pushed for deeper cuts than the 15,000 jobs eliminated under former CEO Pat Gelsinger in 2024—a stance that reportedly led to his temporary exit from the board.

Now leading the company, Tan is implementing a flatter leadership structure, with key chip groups like design and manufacturing reporting directly to him, aiming to speed up decision-making. Recently, Intel sold a 51% stake in its programmable chip unit, Altera, to Silver Lake Management for an undisclosed sum, signaling a divestment of non-core assets.

Tan has also emphasized a return to engineering excellence, criticizing Intel’s bloated middle management as a barrier to innovation. This restructuring aligns with Tan’s vision to rebuild Intel’s competitive edge in AI and advanced chipmaking. [Source: The Star, Reuters via The Indian Express]

Expanded Impact on Employees and Operations

The upcoming layoffs, affecting over 21,000 employees, will likely target middle management and non-essential roles, though Intel has not specified whether these will involve voluntary buyouts, early retirements, or direct terminations.

This follows Intel’s ongoing downsizing efforts, such as the sale of its Folsom, California, real estate and the elimination of over 1,000 jobs at that campus since January 2023. The cuts will span various sectors, potentially disrupting operations in the short term as Intel reconfigures its workforce.

Employees in administrative roles may face the heaviest impact, while engineering teams are expected to be preserved or even expanded to align with Tan’s engineering-focused strategy. The scale of these layoffs—Intel’s largest ever—underscores the severity of the company’s challenges and the urgency of its turnaround plan. [Source: TechCrunch, ET Telecom]

Broader Tech Industry Context in 2025

Intel’s layoffs are part of a larger wave of workforce reductions in the tech sector in 2025, driven by economic uncertainty, the rise of AI, and global trade tensions. According to Layoffs.fyi, over 149,000 tech workers lost jobs in 2024, with companies like Google, Microsoft, Meta, and Tesla implementing significant cuts.

In 2025, the trend continues, with over 23,500 tech employees laid off across 93 companies by mid-April, per India Today. This reflects a strategic shift toward automation, AI, and cost-efficiency, as firms prioritize high-growth areas. For Intel, the competitive pressure from Nvidia in AI chips and TSMC in manufacturing is acute.

Additionally, the Trump administration’s tariffs, including a 25% levy on automobile imports announced on March 26, 2025, have added uncertainty, impacting global supply chains and prompting companies like Volvo to cut jobs in the U.S. Intel’s restructuring must navigate these external pressures while addressing internal inefficiencies. [Source: India Today, LiveMint]

Analyst Perspectives and Market Reactions

Analysts have varied takes on Intel’s restructuring. Cantor Fitzgerald’s C.J. Muse sees the layoffs as a potential bullish catalyst, suggesting they could boost Intel’s stock by signaling a serious commitment to change.

The upcoming Intel Foundry Day on April 29, 2025, is also viewed positively, with expectations that Tan will outline a clearer path for the foundry business, including potential joint ventures. However, some analysts warn that cost-cutting alone won’t suffice—Intel needs a robust growth strategy to reclaim market share.

The company’s recent efforts to attract clients like Nvidia and Broadcom for test runs show promise, but uncertainties around federal funding and global trade dynamics could hinder progress. Posts on X reflect a mix of concern and cautious optimism, with users noting Tan’s aggressive approach as a necessary step for Intel’s survival, though the scale of the cuts has sparked debates about employee morale. [Source: WCCFTech, Posts on X]

Long-Term Implications for Intel and the Industry

While the layoffs aim to streamline operations and redirect resources toward AI and engineering, they pose risks. Intel’s workforce has already shrunk by 23,000 in two years, and further cuts could erode morale and lead to talent loss, particularly in engineering—a critical area for innovation.

Tan’s strategy hinges on creating more compelling products, but if these measures don’t drive growth, Intel’s decline could accelerate, especially as competitors like Nvidia continue to dominate AI. On the positive side, divestitures like the Altera sale and a focus on manufacturing improvements could position Intel for a recovery, especially if Tan leverages the company’s historical strengths in chip design.

The broader tech industry may also feel ripple effects, as Intel’s restructuring could influence other firms to adopt similar cost-cutting measures in response to economic pressures.

Critical Perspective: Is Intel’s Strategy Enough?

Intel’s aggressive layoffs signal a company in crisis, but they also raise questions about the long-term viability of its turnaround plan. While Tan’s focus on engineering and efficiency is laudable, the semiconductor industry demands innovation and speed—areas where Intel has lagged.

The loss of experienced talent through repeated layoffs could hinder product development, especially in AI, where Nvidia’s lead is formidable. Moreover, the uncertainty around Chips Act funding under the Trump administration, coupled with global trade tensions, adds external risks that Intel cannot control.

Critics argue that Intel’s reliance on cost-cutting over innovation may provide short-term financial relief but fail to address the root causes of its market struggles. Tan must balance these cuts with a clear vision for growth, or Intel risks becoming a cautionary tale in the tech industry.

Specification Table: Intel’s Workforce Reduction Timeline

Year	Workforce Size (Start)	Job Cuts Announced	Workforce Size (End)	Key Leadership	Strategic Focus
2023	131,900	15,000	124,800	Pat Gelsinger (CEO)	Cost-cutting, foundry expansion
2024	124,800	15,000 (15%)	108,900	Pat Gelsinger (CEO)	$10B cost-saving, AI investment
2025 (Q1)	108,900	21,000+ (20%+)	TBD	Lip-Bu Tan (CEO)	Engineering focus, divestitures

Final Thoughts: What’s Next for Intel?

Intel’s announcement of over 20% job cuts this week underscores the chipmaker’s urgent need for transformation. While Tan’s strategy aims to address inefficiencies and reposition Intel in the AI-driven market, the road ahead is fraught with challenges.

The Q1 2025 earnings call on April 24 will provide official confirmation and likely reveal more about Tan’s vision, while the Intel Foundry Day on April 29 could offer insights into the company’s manufacturing strategy. For employees, the uncertainty is daunting, and for investors, the coming weeks will be critical in assessing Intel’s trajectory.

As the tech industry evolves, Intel’s ability to innovate and adapt will determine its fate. What do you think about Intel’s restructuring? Share your thoughts in the comments, and stay tuned for updates on this unfolding story!