Intel Slashes Workforce by 15%, Halts German and Polish Plant Projects
CEO overhauls strategy amid financial struggles and a shift away from costly expansion.
Intel’s stock plunged 9% as CEO Lip-Bu Tan announced sweeping changes, including laying off approximately 15% of its global workforce, equating to about 24,000 employees. The chip giant is also adopting a “fundamentally different approach to building our foundry business” in an effort to reverse its fortunes.
Strategic Reorientation Underway
In a company-wide memo, **Mr. Tan** revealed that significant workforce reductions have already occurred in the second quarter, alongside a 50% decrease in management layers. The company anticipates concluding the year with approximately 75,000 employees, a figure impacted by both layoffs and natural attrition.
The impact is being felt at Intel’s Irish operations, where around 4,900 people are employed. Some job cuts have been implemented at the Leixlip, County Kildare facility, with reports indicating up to 195 staff could face compulsory redundancy.
Global Footprint Reviewed
Further signaling a pivot, **Mr. Tan** confirmed the cessation of work on two plants in Germany and Poland. Construction on another facility in Ohio will be slowed. This marks a departure from the previous strategy, which heavily relied on constructing expensive new manufacturing sites.
“Over the past several years, the company invested too much, too soon – without adequate demand. In the process, our factory footprint became needlessly fragmented and underutilised. We must correct our course.”
—Lip-Bu Tan, CEO, Intel
These decisions follow a surprising adjusted loss in the second quarter and a more pessimistic outlook for the third quarter. **Mr. Tan** criticized the investments initiated by his predecessor, **Pat Gelsinger**, as excessive and ill-advised, stating, “I do not subscribe to the belief that if you build it, they will come.”
The company plans to reduce capital expenditures for new plants and equipment this year, with further cuts anticipated for 2026. Executives indicated spending would be around $18 billion for the current year, decreasing thereafter. Intel’s foundry ambitions, particularly its pursuit of the advanced 14A production technique championed by **Mr. Gelsinger**, will now proceed with caution under **Mr. Tan**’s leadership.
Analysts are closely watching these developments. TD Cowen analyst **Joshua Buchalter** noted that the disclosures “revive long-unanswered questions on the chances of success for its foundry business and… what the path forward is if Intel does not develop leading edge manufacturing capability.” He added, “It’s hard to understate the significance of this potential outcome in the context of the history of the semiconductor industry.”
For context, TSMC, a major foundry competitor, announced a 10% increase in its capital expenditure for 2024 to support advanced chip manufacturing, highlighting the competitive landscape Intel faces (Reuters, January 2024).
