$10 Billion Gamble: Can Massive Layoffs Save the Chipmaker?

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Intel is preparing to announce a sweeping round of layoffs that could see more than 21,000 employees—approximately 20% of its global workforce—let go, according to reports surfacing ahead of the company’s first-quarter earnings call this week. The move, which follows last year’s cut of 15,000 jobs, is part of a broader effort by new CEO Lip-Bu Tan to streamline operations and refocus the company on engineering excellence in the face of mounting challenges from competitors like Nvidia in the artificial intelligence sector.

The chipmaker’s workforce has already shrunk significantly, from about 131,000 in 2022 to 108,900 at the end of 2024. The scale and geographic distribution of the upcoming layoffs remain unclear, including the impact on Intel’s 4,900 staff in Ireland. Intel has so far declined to comment on the reports.

These drastic measures come as Intel grapples with declining revenues, rising costs, and eroding profit margins. The company has struggled to capitalize on the AI boom, lagging behind rivals in a market that is rapidly shifting toward next-generation computing. Former CEO Pat Gelsinger previously acknowledged the need for “bolder actions” to address Intel’s financial performance, which has been hit by underwhelming sales and mounting competition.

In addition to job cuts, Intel is expected to announce further cost-saving initiatives, including voluntary departure programs and enhanced retirement packages, as it aims to reduce spending by $10 billion in 2025. The company’s financial results, due to be reported on Thursday, may shed more light on the restructuring and its future strategy amid ongoing uncertainty in global supply chains and escalating US-China trade tensions.