Intel Cutting 25,000 Jobs in Huge Move to Focus on AI Chips

Intel is letting go of roughly 25,000 workers as the company tries to fix its business and focus on AI chips, according to a Fortune report. The massive job cut represents about 15% of the company’s total staff. The move comes as the new CEO tries to save money to better compete in the fast-moving AI market.

• Source: Fortune
• Additional source: Ctech
• Industry: Tech
• Total Job Cuts: 25,000 (15% of workforce)
• Main Reason: Funding AI and data center chip production

No More Blank Checks

The new CEO, Lip-Bu Tan, sent a memo to the staff explaining the tough news. He made it clear that the company needs to be much more careful with its money. A source said the memo told workers there are no more blank checks at Intel (INTC). From now on, every project and investment must prove that it makes sense for the company’s wallet.

Intel is trying to move away from old ways of doing things. The company grew too big while its sales did not grow enough. The CEO wants to make the company simpler and faster. This plan involves cutting costs and making sure the remaining teams can work better together without so much red tape.

Pausing Big Projects

The job cuts are not the only way Intel is saving money. The company is also changing its plans for building new factories. Intel is pausing its big factory projects in Germany and Poland for at least two years. It is also slowing down the construction of its new chip plant in Ohio. These changes help the company keep more cash while it tries to catch up with rivals like Nvidia.

In the past, Intel built factories before it was 100% sure the demand was there. Now, the company will only build when it knows customers are ready to buy. This is part of a plan to fix how Intel builds chips for other companies, a part of the business known as the foundry division.

The AI Race

The main goal of these cuts is to free up money for AI technology. Intel has fallen behind in the race to build the chips that power things like ChatGPT. By cutting 25,000 jobs, the company hopes to have enough money to invent new AI chips that can win back customers. While the cuts are painful, leaders say they are necessary to keep the company alive and healthy for the long run.

Investors seem to like the new plan. After the news broke, Intel’s stock price went up as people hoped these changes would finally turn the company around. However, for the thousands of workers losing their jobs, the next few months will be a very difficult time.

Massive job cuts at Intel

This video provides a deeper look at the massive job cuts hitting Intel’s global workforce.