Intel’s new CEO Lip-Bu Tan is swinging the ax again, with another round of layoffs incoming as Chipzilla tries to reboot its core.
Earlier reports suggested Intel could shed up to 20 percent of its current workforce, or around 20,000 people.
In a note to investors during a Q1 2025 earnings call Thursday, Tan emphasized the need to streamline Intel’s operations and said the era of its managers treating staff size as a key performance indicator has come to an end.
“There is no way around the fact that these critical changes will reduce the size of our workforce,” said Tan. “As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2 and we will move as quickly as possible over the next several months.”
Tan used a novel term for the pending layoffs during Intel’s conference call for investors. “We need to get our balance sheet healthy and start the process of de-laborating this year,” he said.
The chopping started long before Q2. The beleaguered chipmaker laid off about 15 percent of staff in August, finishing 2024 with a headcount of 108,900 employees and the ouster of former CEO Pat Gelsinger.
Since then, the bleeding hasn’t stopped. From the start of the year through March 29, 2025, Intel laid off or lost 1,900 employees, plus 400 from MobileEye and other subsidiaries. It also dropped about 4,000 with the divestiture of its NAND memory business, leaving it with a headcount of 102,600 as of last month.
The latest headcount squeeze comes with Intel’s Q1 2025 revenue clocked in at $12.7 billion, flat year-on-year.
On the business unit front, the chip maker’s the Client Computing Group (CCG) posted $7.6 billion in revenue, down 8 percent; the Data Center and AI (DCAI) division pulled in $4.1 billion, up 8 percent; and Intel Foundry brought home $4.7 billion, up 7 percent.
Intel also booked $156 million in restructuring charges for the quarter, compared to $348 million in the same period a year ago. Its operating expense target for 2025 has been reduced to $17 billion from $17.5 billion, and to $16 billion in 2026.
That planned belt-tightening includes cuts to research and development (R&D), and marketing, general and administrative (MG&A), is expected to incur additional restructuring charges, but Intel said it has not yet estimated these costs and thus has excluded them from its guidance.
The chip biz also revised its Return to Office policy, requiring hybrid employees to work from an Intel facility at least four days per week, up from three presently, starting September 1.
These new pushes followed a leadership reshuffle. Tan, who previously helmed Cadence, was appointed Intel’s CEO in March, pledging to streamline operations and enhance shareholder value.
Speaking last month at the Intel Vision 2025 event, Tan said, “Under my leadership, Intel will be an engineering-focused company. … We will listen closely and act on your input. Most importantly, we will create products that solve your problems and drive your success.”
In a statement accompanying Intel’s earnings release, Tan indicated that he’s still working to implement his vision for the company.
“The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth,” he said.
“I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”
Asked to confirm the reported 20 percent headcount cut, a spokesperson for the x86 titan told us: “We have not set any headcount reduction target. What we have set is a new non-GAAP operating expense target to approximately $17 billion in 2025, down from our previously stated goal of $17.5 billion, and $16 billion in 2026.” ®
