Intel announces restructuring – AI pressure and investment backlog force tough austerity measures

4/25/2025, 6:23 PM

Intel struggles with losses and AI competition – new CEO focuses on cost reduction, job cuts, and strategic reversal.

Eulerpool News Apr 25, 2025, 6:23 PM

Intel is facing a profound restructuring.

Revenue is expected to be between $11.2 billion and $12.4 billion in the second quarter – well below analysts' expectations, who on average projected around $12.8 billion. The stock lost over five percent after hours.

Intel was able to exceed its own forecast in the first quarter with $12.7 billion in revenue. However, the quarterly loss amounted to $800 million – twice as much as the previous year. The adjusted earnings per share were $0.13 – significantly above the expected $0.01.

Intel, once the undisputed market leader in semiconductors, is increasingly overshadowed by Nvidia. In particular, the graphics specialist from California dominates the market for AI chips—a field in which Intel has so far failed to keep up.

The core business with PC and server processors is also under pressure. Former CEO Pat Gelsinger had aimed for expansion as a foundry - with billion-dollar investments in new plants in Magdeburg and Ohio. However, both projects were put on hold last year. Tan announced plans to use existing capacities more efficiently before approving new investments.

The number of employees has already dropped significantly – from over 124,000 in September to 109,000 by the end of the year. According to Bloomberg, a further reduction of up to 20 percent could now be imminent. CFO David Zinsner has not yet confirmed this, but referred to ongoing cost reduction reviews.

With Lip-Bu Tan, an experienced industry strategist takes the helm, but the pressure is high. The AI revolution is underway, and Intel is lagging behind.

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