Intel is laying off thousands of US workers in AI restructuring — CEO Lip-Bu Tan says it’s “too late” to catch up with the competition

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Intel is significantly reducing its workforce, with numerous job losses impacting thousands of employees predominantly in support roles across various locations such as California, Oregon, and Texas in the United States. Furthermore, a large number of workers at Intel Foundry are being let go from fabrication plants located in Israel (according to The Register).

These job cuts are a consequence of a company announcement made by CEO Lip-Bu Tan, who informed his team that Intel no longer ranks among the top 10 semiconductor companies. Furthermore, he stated that it is now impractical for them to develop in-house AI models on hardware that struggles to challenge NVIDIA’s market supremacy within this field (as reported by Oregon Live).

Due to uninspiring product launches and high costs in its semiconductor manufacturing sector, the company is now concentrating more on developing edge and autonomous AI technologies that operate on local devices instead of remote data centers. New leaders are being brought in to lead this transition and help Intel reclaim its status as a leading global technology company.

As an observer, I’ve noticed that since taking over from the former CEO, Pat Gelsinger, Lip-Bu Tan has been spearheading a restructuring initiative at Intel. This plan, estimated to cost approximately $1.5 billion, is geared towards reducing the company’s workforce by 20%. (Source: Tom’s Hardware)

He understands that revitalizing the struggling business will be no simple task; instead, it’s a long-term effort to close the gap with industry leaders such as AMD and NVIDIA in terms of processor technology and AI capabilities, a feat that even NVIDIA’s CEO, Jensen Huang, considers challenging, as he disputes suggestions that AI could significantly reduce entry-level white-collar positions by half.

Earlier this year, I shared some exciting news about our journey towards transformation. We’re not just talking about shedding a few pounds or running a bit faster; we aim to streamline our operations, boost our speed, and optimize efficiency like a well-oiled machine!

Intel

For several years, I’ve been a supporter of some Intel products, primarily in the consumer sector, with less emphasis on their large-scale data center chips. However, it’s disappointing to witness Intel struggling to meet its objectives after such a long period of market leadership. On the other hand, NVIDIA has surpassed the $4 trillion mark and is undoubtedly leading the field in AI hardware technology.

Last year, Intel’s Lunar Lake mobile processors truly stole the show for me, as they significantly boosted power efficiency and graphics performance in devices I’ve grown fond of, like laptops and the MSI Claw 8 AI+ handheld gaming PC. I’ve been thoroughly enjoying playing around with these devices lately and can’t help but heap similar praises on them. Compared to their predecessor, Meteor Lake, the improvement was so substantial that it barely felt like a tough call to recommend any devices incorporating them.

In contrast, repeatedly testing the Intel Core Ultra 9 285K desktop processor seemed to suggest that Intel could potentially relinquish its leading position, as its gaming performance barely outperformed its previous Intel Core 14th Gen chips, which were already marred by the same persistent instability issues that affected their 13th Gen forerunners.

Feeling frustrated about all these developments, especially Intel seemingly ignoring their “Battlemage” line of desktop graphics cards, I can’t help but lament the unrealized possibilities for Intel as a competitive third player in the graphics processing unit (GPU) market.

In simpler terms, the same advanced graphics technology can be found within the Xe2 GPU modules of Lunar Lake processors. However, it’s the desktop market that we’re aiming for, a market that is currently dominated by NVIDIA’s high-end RTX 50 Series and AMD’s competitive yet affordable Radeon RX 9000 series.

Absolutely, downsizing and job losses are common aspects of large corporations. In Q3 of 2024, Intel reported a loss of $16.6 billion in revenue, signaling tough times ahead. Now, these cost-cutting measures are being implemented not just in the US but also in their international branches. This is a harsh situation for the affected employees. The company faces significant pressure to demonstrate its ability to bounce back after trimming expenses.

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2025-07-17 14:09