Intel restructures chip operations, scaling back its investment in chip fabrication, cuts workforce, and tightens production strategy, to minimise revenue loss.
Intel has initiated a broad restructuring of its operations in a move to stabilise its financial performance and streamline future investments. The chipmaker reported a second-quarter net loss of $2.9 billion, despite revenue touching $12.86 billion, which is flat year-on-year. The decline follows major restructuring charges and excess inventory impairments.
The company is scaling back capital expenditure and aligning investments with tangible customer demand. A key shift includes halting speculative fab expansion, with projects in Germany and Poland scrapped. Intel has also slowed progress on its Ohio manufacturing facility, contingent on market interest and confirmed customer partnerships.
Intel’s foundry division, which manufactures chips for external clients, recorded a loss of $3.17 billion in Q2. With customer acquisition lagging, the company indicated it may pause development of its next-gen 14A process node without anchor clients. This signals a growing dependence on third-party foundries such as TSMC.
To manage operating costs, Intel is implementing deep workforce reductions. Around 15% of staff, over 16,000 roles will be eliminated by year-end, reducing the global workforce to approximately 75,000. The company is also flattening its organisational structure by removing 50% of management layers.
Going forward, all chip designs will require executive-level review before entering production. Intel aims to ensure capital discipline and improve return on investment across its product pipeline.
While Intel launched new Xeon 6 series processors and began producing 18A wafers in Arizona during Q1 of 2025, the company acknowledged that regaining competitiveness in the data centre and AI markets will require sustained focus and leadership changes.
For Q3, Intel projects revenue between $12.6 billion and $13.6 billion, with gross margins under continued pressure. The restructuring effort marks a decisive attempt to reset operations and restore credibility among customers and investors in a challenging semiconductor environment.
