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Intel CEO Lip-Bu Tan Cuts Projects and Jobs in Bid to Streamline Operations
July 24, 2025
Intel is making bold moves to reshape its operations under new CEO Lip-Bu Tan, who is pushing forward with a plan to eliminate inefficiencies and bring focus to the semiconductor giant’s sprawling operations. The company’s second-quarter earnings report, released Thursday, outlined a series of significant cutbacks — including the cancellation or delay of multiple manufacturing projects and continued workforce reductions.
Among the biggest decisions: Intel is scrapping its proposed chip factory in Germany and an assembly and testing facility in Poland, both of which had been suspended since 2024. These projects had been heavily promoted but never moved forward. Additionally, Intel plans to consolidate test operations in Costa Rica, shifting those functions to Vietnam and Malaysia.
“Unfortunately, the capacity investment we made over the last several years was well ahead of demand and were unwise and excessive,” said Tan during the earnings call. “Our factory footprint has become needlessly fragmented.”
The company also announced a further delay to its $28 billion Ohio chip factory, a high-profile project that was originally scheduled to open in 2025. The factory had already been delayed earlier this year and now has no firm completion date.
The second quarter marked Tan’s first full quarter as CEO, after taking the helm in March. Since stepping into the role, he has focused on streamlining Intel’s operations, shedding non-core units, and eliminating redundancies. According to Tan, Intel aims to tie capital expenditures more closely to actual demand, rather than speculative growth.
Workforce cuts are another central part of the transformation. Intel said it has reduced headcount by 15%, aiming to end 2025 with about 75,000 employees — down from nearly 109,000 at the end of 2024, and a significant drop from the 124,800 employed at the end of 2023. The company has also eliminated 50% of its management layers, a move designed to boost efficiency and accountability.
One of the most affected areas is Intel’s Foundry unit, which builds chips for external clients. In June, Intel announced internally that it would lay off 15% to 20% of workers in that division.
“We have much work to do in building a clean and streamlined organization,” Tan said. “Our goal is to reduce inefficiencies and redundancies and increase accountability at every level of the company.”
Tan’s aggressive restructuring signals a pivotal shift in strategy as Intel looks to stay competitive in a global semiconductor landscape marked by overcapacity, fluctuating demand, and intense geopolitical pressures. As the company tightens its belt, all eyes are on whether this leaner Intel can deliver the long-term turnaround Tan envisions.
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