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Amid weak Q2 guidance, Intel CEO Lip-Bu Tan unveiled a series of sweeping changes to reshape the company—starting with major layoffs, cost cuts, and more. According to Intel’s press release and media reports, layoffs affecting up to 20% of the workforce are set to begin in Q2, with 2025 capex target trimming down 10% to $18 billion.
Intel CEO Lip Bu-Tan, just several weeks into the job, rolled out bold changes today at the earnings call. As highlighted by Tom’s Hardware and wccftech, while Team Blue hasn’t confirmed layoff numbers, rumors suggest that up to 20% of staff—nearly 20,000 jobs—could be on the line, and the workforce reduction will likely roll out over months.
Notably, the upcoming layoffs come on the heels of a major workforce cut last August, when Intel announced plans to reduce headcount by 15% as part of former CEO Pat Gelsinger’s broader turnaround strategy. Tan seems to follow this path.
In the press release, Tan made a strong statement by saying that he has been surprised to learn “in recent years, the most important KPI for many managers at Intel has been the size of their teams. Going forward, this will not be the case.”
Tightens Belt as 2025 Capex, Operating Costs Trimmed
Meanwhile, as indicated by Reuters, Intel has also lowered its 2025 gross capital expenditures target to $18 billion, down from the earlier projection of $20 billion. Intel explains that this is fueled by further operational efficiencies and better utilization of construction-in-progress assets, and reiterates it will continue to focus investment in its core business.
Intel is certainly tightening its belt, as it has also decided to slash $1.5 billion in operating costs over the next two years. According to its press release, Intel is reducing its non-GAAP operating expense target to approximately $17 billion in 2025, down from its previously stated goal of $17.5 billion, and is now targeting $16 billion in 2026.
Aligning with this goal, Intel’s CFO, David Zinsner, stated that in the short term, Intel plans to hold off on most acquisitions, as per Reuters. “Our priority will need to be, at this point, getting the balance sheet to a better place,” he said.
Back to Office Again
In the press release, Tan also noted that the current policy, which requires employees to be on site for three days per week, has not been followed consistently. The company will now require all employees to be in the office for four days per week, effective September 1, he added.
In addition to stricter return-to-office rules, Tan has announced measures to streamline the internal process. For instance, he is making Insights and OKRs optional. The company will also reduce time spent on non-essential tasks like training and documentation, he said.
Q2 Struggles to Break Even Amid Tariff Risks
Will these drastic measures turn Intel around? According to Reuters, Team Blue expects Q2 revenue between $11.2 billion and $12.4 billion, falling short of analysts’ average estimate of $12.82 billion and lower than Q1’s $12.67 billion.
While President Trump has exempted chips from U.S. tariffs for now, China’s hefty retaliatory levies on U.S.-made semiconductors are clouding Intel’s outlook in its largest market. The company expects second-quarter per-share adjusted profit to break even, compared with estimates of profit of 6 cents per share, as per Reuters.
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(Photo credit: Intel)
