Intel recently revealed its intent to reduce its workforce to 75,000 employees by the end of 2025, reflecting the company's efforts to adapt to changing market conditions and revise its global manufacturing strategy. The announcement comes as Intel forecasts a higher-than-expected quarterly loss, with shares dropping over 5% in after-hours trading.
In a memo to employees, CEO Lip-Bu Tan emphasized the company's revised approach to capacity expansion, stating that new facilities will only be built when there is clear demand for chips.
As part of this strategy, Intel will decelerate the construction of its new plant in Ohio and has decided to halt projects for planned factories in Poland and Germany. Furthermore, Intel will merge its chip packaging operations in Costa Rica with those in Vietnam and Malaysia, signaling a move away from its traditional practice of maintaining geographically dispersed operations to bolster supply chain resilience.
The company, which began its layoffs in July, reported that the reductions as of June 30 accounted for about 15% of its workforce. The remaining cuts will be achieved through natural attrition and other means, ultimately reducing its employee count to 75,000 from 99,500 at the end of last year.
Intel also revealed that its forecasted quarterly loss of US$0.24 per share exceeds the market's expectation of US$0.18 per share. Revenue for the quarter is projected to range between US$12.6 billion and US$13.6 billion, with a midpoint of US$13.1 billion, surpassing market estimates.
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