Intel to Cut 24,000 Jobs in 2025, Scales Back Projects in Germany and Poland
Intel is undergoing a significant transformation in 2025, announcing plans to reduce its workforce by 24,000 employees. This move is part of a broader strategy to prioritize AI and streamline operations. After reporting Q2 earnings, the company revealed that it would consolidate its team to 75,000 core employees. According to The Verge, this results in thousands of jobs being cut.
As part of the consolidation, Intel will also back away from ambitious plans in Europe. Construction of fabrication plants in Germany and Poland will be halted. These projects had initially promised thousands of new jobs. Additionally, Intel will shift parts of its Costa Rica operations to Vietnam. While some roles remain, assembly and testing teams will be affected.
Although restructuring is painful, Intel aims to save $17 billion within a year. Moreover, Intel CFO David Zinsner confirmed that construction in Ohio would also slow to better reflect market demand.
A Company Struggling to Keep Up
Intel’s fall from dominance didn’t happen overnight. Once a leader in PC chip manufacturing, the company failed to keep pace with market trends. While rivals like AMD, Apple, and NVIDIA embraced mobile and AI chip development early on, Intel was slow to adapt. This misstep has proven costly.
Between 2022 and 2023, Intel reported combined operating losses of over $12 billion. Despite releasing its first Intel Core Ultra Series 1 AI chips in 2024, they underperformed compared to competitor offerings. Consequently, Intel rushed out its Series 2 chips that same year.
Relations with suppliers also worsened. A controversial comment by then-CEO Pat Gelsinger in a Fortune interview damaged ties with TSMC. That fallout led to the loss of a 40% wafer discount, significantly increasing Intel’s production costs.
What Lies Ahead for Intel?
Intel is placing high hopes on upcoming Panther Lake and Nova Lake processors to help regain its market standing. However, challenges remain. The company must manage costs while competing in an increasingly AI-driven chip market. Although this latest restructuring aims to strengthen Intel’s position, additional layoffs or canceled initiatives could still emerge.
Ultimately, Intel is betting that streamlining operations and focusing on innovation will reverse its fortunes. Whether that gamble pays off, only time will tell.
