Intel Plans Massive Workforce Cut With 21,000 Jobs on the Chopping Block

Intel $INTC ( ▼ 6.7% ) is reportedly preparing to lay off more than 21,000 employees, representing approximately 20% of its total workforce. The announcement is expected this week, just ahead of the company's first-quarter earnings call scheduled for April 25^1.

This dramatic workforce reduction marks the second major round of layoffs at Intel in less than a year.

The company previously cut 15,000 positions in August 2024, bringing its total employee count down to roughly 108,900 by year-end^1,^6,^13.

If implemented as reported, this new round of cuts would bring Intel's total workforce reductions to over 36,000 employees in less than a year.

The New CEO's Bold First Move

The reported layoffs represent the first significant restructuring initiative under CEO Lip-Bu Tan, who took the helm at Intel just last month in March 2025.

Tan, a veteran of the semiconductor industry, previously served as CEO of chip software company Cadence Design Systems from 2009 to 2021^6.

Industry observers note that Tan is wasting no time in implementing his vision for the struggling chipmaker. Since taking over leadership, he has repeatedly emphasized his intention to transform Intel into an "engineering-focused company".

In a March memo to employees, Tan expressed confidence in turning the business around, stating that Intel would push itself to develop better products, listen to customers, and build trust through accountability.

Tan's Leadership Timeline:
- August 2024: Stepped down from Intel's board after reported clashes with former CEO Pat Gelsinger
- March 2025: Appointed as Intel's new CEO
- April 2025: Reportedly initiating 20% workforce reduction

Behind the Cuts: Financial Struggles and Market Position

The drastic workforce reduction comes amid significant financial challenges for the once-dominant chipmaker. Intel's financial performance has deteriorated substantially in recent years:

Intel's stock price has tumbled roughly 65% over the last five years, reflecting investor concerns about the company's competitive position and future prospects.

The company reported its first annual loss since 1986 last year, with a staggering $19 billion loss for 2024^9,^14.

Looking at the most recent quarterly performance, Intel reported $14.3 billion in revenue for Q4 2024, representing a 7% decline year-over-year. For the current quarter (Q1 2025), Intel has forecast revenue between $11.7 billion and $12.7 billion^5,^11.

Strategic Rationale: Engineering Culture and Bureaucracy Reduction

According to reports, the massive layoffs are part of a broader strategy to streamline operations, reduce bureaucracy, and rebuild an engineering-driven culture at Intel.

Sources familiar with the matter indicate that Tan believes the company's middle management is particularly problematic – slow, inefficient, and creating unnecessary layers of bureaucracy that impede innovation and decision-making^9,^13,^15.

The job cuts align with Intel's previously announced goal of reducing costs by $10 billion in 2025.

This cost-cutting initiative was driven by high operational expenses, declining profit margins in Intel's primary PC and data center divisions, and costly transitions to AI chip production – an area where Intel has notably lagged behind competitors like Nvidia.

Key Factors Driving the Restructuring:
- Middle management inefficiency
- High operational expenses
- Declining profit margins
- Need for faster innovation
- Competitive pressures in AI chip market

Competitive Landscape: Falling Behind Rivals

Intel's aggressive restructuring comes as the company faces unprecedented competitive pressures. Once the undisputed leader in semiconductor technology, Intel has struggled to maintain its market position against nimble competitors:

The company has seen its sales decline for three consecutive years as competitors like Nvidia have surged ahead, particularly in the booming AI chip market.

Intel's client computing segment, which focuses on PC processors, is projected to report a year-over-year revenue decline of approximately 9% in Q1 2025, despite a temporary surge in demand driven by customers stockpiling chips ahead of potential US tariffs^4,^10.

Near-Term Outlook and Potential Misleading Signals

Interestingly, Intel's Q1 2025 earnings report (expected this week) may show a temporary boost in performance due to an artificial demand surge.

Manufacturers have reportedly accelerated chip purchases due to concerns about looming US tariffs – a phenomenon known as "pull-forward" demand^4,^10.

Recent industry data shows a 4.9% increase in PC shipments, but analysts attribute this primarily to tariff concerns rather than genuine market growth.

This temporary demand spike could create a misleading impression of sustained growth, potentially masking underlying weaknesses in Intel's business segments.

Looking Forward: Tan's Vision for Intel's Future

Despite the painful job cuts, Tan appears to be positioning Intel for a significant strategic pivot.

Since taking on the CEO position, he has initiated the process of restructuring certain divisions of Intel into "non-core" segments. Earlier this month, Intel divested 51% of its Altera semiconductor division to private equity firm Silver Lake^1.

The restructuring focuses on several key priorities:

1. Upgrading production processes

2. Expanding manufacturing for external clients like Nvidia

3. Reorganizing AI operations

4. Refocusing on core engineering capabilities

5. Eliminating bureaucratic inefficiencies

Intel's Production Strategy Shift
From: Manufacturing chips primarily for Intel's own products
To: Expanding manufacturing services for external clients

Workforce Impact and Implementation Timeline

While the specific details of the layoffs have not been officially announced, the cuts are expected to affect positions across the organization. The previous round of layoffs in August 2024 reportedly targeted mostly non-manufacturing and non-engineering roles, such as sales, marketing, and administration.

This new round appears more focused on eliminating managerial positions and reducing bureaucratic layers, consistent with Tan's stated goal of creating a more engineering-centric organization^9,^13,^15.

The company is expected to provide more details during its Q1 2025 earnings call scheduled for April 25.

Industry Implications and Recession Indicators

Intel's massive workforce reduction adds to a growing list of tech companies that have implemented significant layoffs over the past year.

Some market observers have pointed to these large-scale tech industry layoffs as potential "recession indicators".

The semiconductor industry as a whole is undergoing significant changes, with Intel caught in the middle due to its financial struggles and intensifying competition.

How Intel navigates this restructuring will be closely watched not just by semiconductor industry participants, but by the broader technology sector and investors concerned about economic signals.

Whether Tan's bold moves will succeed in revitalizing the once-dominant chipmaker remains to be seen. What's clear is that Intel is betting on a leaner, more engineering-focused organization as its path forward in an increasingly competitive semiconductor landscape.