Intel Cuts 31% Workforce to Compete With Nvidia \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Intel Corp. plans to reduce its workforce by 31% as part of a sweeping restructuring under new CEO Lip-Bu Tan. The company is cutting global projects and realigning resources to regain competitiveness in AI and chipmaking. Once a tech titan, Intel now trails far behind rivals like Nvidia.
Quick Looks
- Intel to reduce headcount from 108,900 to 75,000 by year’s end.
- CEO Lip-Bu Tan announces layoffs and organizational restructuring.
- Cuts include canceled projects in Germany and Poland.
- Costa Rica operations shifting to Vietnam and Malaysia.
- U.S. Ohio chip plant construction slowed further.
- Intel missed mobile and AI chip shifts, now lags behind Nvidia.
- Nvidia now valued at over $4.24 trillion vs. Intel’s $98.71 billion.
- Intel aims to improve efficiency, accountability, and focus under new leadership.
- Strategic pivot seeks to regain competitive edge in semiconductor market.
- Attrition and layoffs will drive 31% workforce reduction.
Deep Look
Intel Corp., the pioneering chipmaker once synonymous with Silicon Valley’s rise, is undergoing a sweeping transformation as new CEO Lip-Bu Tan takes aggressive steps to reverse the company’s declining fortunes. The company announced this week that it will cut its workforce by 31%, reducing headcount from 108,900 to 75,000 employees by year’s end—a dramatic downsizing intended to make Intel leaner, more efficient, and better positioned in the increasingly competitive semiconductor market.
In a company-wide memo, Tan acknowledged the difficulty of the moment. “I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency, and increase accountability at every level of the company,” he wrote.
Intel had already disclosed plans for a 15% workforce reduction, but the updated figure, now including layoffs and natural attrition, represents a much deeper organizational cut. The announcement reflects the scale of the challenge facing Intel, which, after dominating the computing landscape for decades, now finds itself significantly behind competitors like Nvidia, which has surged to prominence amid the global race for AI hardware.
As of Thursday’s market close, Intel’s market capitalization stood at $98.71 billion, a fraction of Nvidia’s towering $4.24 trillion valuation. That stark gap illustrates how Intel, once the undisputed leader in microprocessors, has missed several key technological shifts, most notably mobile computing and now artificial intelligence.
Founded in 1968, Intel was a key force behind the personal computing revolution. But its failure to adapt to the mobile era, triggered by Apple’s iPhone launch in 2007, marked the beginning of its fall from grace. More recently, the meteoric rise of AI has brought further pressure, as Nvidia’s specialized chips have become the cornerstone of high-performance computing across industries from cloud services to autonomous vehicles and generative AI.
As part of its broader restructuring, Intel will cancel previously announced projects in Germany and Poland, eliminating costly overseas expansion plans that no longer align with the company’s refocused strategy. Additionally, the company will relocate assembly and testing operations from Costa Rica to larger and more cost-effective facilities in Vietnam and Malaysia. Still, Tan emphasized that Costa Rica would remain “home to key engineering teams and corporate functions,” preserving a footprint in the region.
In the United States, Intel said it will also further delay construction of its long-anticipated semiconductor facility in Ohio, a project once touted as a major investment in U.S.-based chip production. The slowdown, while not a cancellation, suggests a strategic reallocation of resources as Intel prioritizes short-term efficiency over long-term infrastructure buildup.
These moves reflect Tan’s urgent effort to refocus Intel on core competencies, cut costs, and accelerate decision-making processes that had grown bloated and bureaucratic. His leadership signals a shift toward a more agile, disciplined, and innovation-driven Intel, one better prepared to reclaim relevance in an industry now defined by speed, scalability, and specialization.
Intel’s restructuring comes at a time when semiconductors are a global economic and geopolitical priority, with governments worldwide, including the U.S., offering incentives to boost domestic chip production. Despite Intel’s long-standing status as an American icon, it has struggled to compete in both innovation and production efficiency with companies like Nvidia, AMD, and Taiwan Semiconductor Manufacturing Co. (TSMC).
While the announced cuts are severe, some analysts view them as a necessary correction for a company whose costs, structure, and culture no longer match the demands of the modern semiconductor market. Intel’s future now hinges on its ability to execute this turnaround, regain trust from investors, and deliver competitive chips in AI, data centers, and next-generation computing.
For thousands of employees, the transformation means uncertainty and change. For Intel, it may be the last real chance to reclaim its leadership in a sector it once defined.
Intel Cuts 31%
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