US chip maker Intel reports revenue hike as it trims workforce
Intel Faces Production Delay and Workforce Reduction
Production in Ohio Postponed to 2030
Intel announced that the new chip‑making facilities in Ohio will not begin production until 2030, a five‑year delay from the original timeline. The postponement is part of a broader strategy to streamline operations and prepare for upcoming demand shifts.
Workforce Reduction to Attract Agility
In a quarterly earnings release, Intel disclosed a 15 % reduction in its core workforce, amounting to roughly 15 % of its total staff. The company emphasized the move as a step toward a faster‑moving, flatter, and more agile organization.
Revenue Tops Expectations, Loss Persists
Quarterly revenue reached $12.9 billion, surpassing market forecasts. However, the chip maker reported a $2.9 billion loss, which included $1.9 billion in restructuring charges. The earnings report came amid stronger performance from rivals specialized in GPU‑based AI chips.
Strategic Discontinuation in Europe
Intel announced that it will no longer proceed with projects in Germany and Poland, a move aimed at saving billions of dollars. The discontinuation reflects a shift toward more cost‑efficient production and a focus on core competencies.
Market Context: AI and Memory Chip Demand
Asian competitors such as TSMC, Samsung, and SK Hynix are dominating the semiconductor market, especially in the AI and memory chip sectors. SK Hynix reported record quarterly profits due to soaring AI demand, and TSMC announced a surge in net profit for the second quarter. Meanwhile, Dutch company ASML recorded higher net profits in the second quarter of 2025 but cautioned that next year’s growth outlook is somewhat less rosy.
Leadership and External Challenges
Chief Executive Officer Lip‑Bu Tan, who took the helm in March, announced layoffs amid White House tariffs and export restrictions that muddied the market. Tan acknowledged the difficulties but pledged to navigate these challenges.
Government Export Controls
Washington has sought to curb exports of state‑of‑the‑art chips to China, citing concerns that such technology could be used to advance Beijing’s military systems and undermine American dominance in AI.
