Intel makes a harsh decision amid declining sales | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

A few months ago, Intel (INTC) employees received a rude awakening from the company’s CEO, Lip-Bu Tan.

In April, the company revealed in its first-quarter earnings report for 2025 that it faced a net income loss of roughly $887 million during the quarter, as overall revenue remained flat and product revenue declined by 3%.

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The poor performance comes during a time when Intel is struggling to keep up with competitors such as Samsung, Nvidia, and IBM, due to its challenges in transitioning to smaller, more efficient chip manufacturing processes.

During an earnings call that month, Tan said Intel would be “taking swift actions to simplify the way we do business and drive transparency and accountability across the company.”

Part of this effort includes a new cost-cutting strategy that involves Intel saving $17 billion in 2025 and $16 billion in 2026 through multiple efforts, such as job cuts. The company is reportedly planning to let go of 20% of its staff, with a focus on removing bureaucracy.

Tan even emailed employees in April, warning them that layoffs at the company will happen “quickly.”

“There is no way around the fact that these critical changes will reduce the size of our workforce,” said Tan in the email. “As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2 and we will move as quickly as possible over the next several months.”

Intel follows through on plans to downsize its workforce.

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Intel has bad news for employees

Now, Intel is following through with its layoff plan as it will be giving 10,000 of its factory workers, about 15% to 20% of its company, the boot, according to a new report from Oregon Live.

“These are difficult actions but essential to meet our affordability challenges and current financial position of the company. It drives pain to every individual,” said Intel Manufacturing Vice President Naga Chandrasekaran in a memo to employees.

He also said that the company will choose which workers to lay off based on their performance, certain investment priorities, and other factors. The company will not offer workers any voluntary buyouts.

“These reductions will be based on a combination of portfolio changes, level and position elimination, skill assessment for remaining positions, and some hard decisions around our project investments,” said Chandrasekaran. “We are also taking into consideration factory operations impact.”

In a statement to Oregon Live, Intel said it will “treat people with care and respect” when conducting layoffs.

“Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution,” said Intel in the statement. “We are making these decisions based on careful consideration of what’s needed to position our business for the future.”

Intel’s layoffs mirror an alarming trend

The move from Intel comes after the Biden administration awarded the tech company $7.9 billion in federal subsidies to support semiconductor manufacturing in the U.S. under the CHIPS Act.

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However, Intel only received $2.2 billion from those federal grants, as the rest is on pause while the Trump administration reviews the awards.

Intel’s layoffs also reflect a startling trend in the tech industry. Tech layoffs in the U.S. this year have so far surpassed 58,000, according to recent data from Crunchbase.

Large tech companies such as Meta, Amazon, Microsoft, and Sony have cut staff amid the rapid growth of artificial intelligence and concerns about tariffs.

In January, about 5,000 U.S. tech employees were laid off, and the following month, roughly 14,000 were given the boot. April saw the highest number of layoffs so far this year, with over 23,800 employees losing their jobs.