In 2025, Intel CEO Lip-Bu Tan initiated a plan to address company inefficiencies, following reports of delayed or canceled manufacturing projects.
Intel’s second-quarter earnings report indicated a reevaluation of its global manufacturing footprint. The company will not proceed with previously announced projects in Germany and Poland. This includes a planned assembly and testing facility in Poland and a chip factory in Germany. These specific projects had been suspended since 2024, shortly after their initial announcements.
Furthermore, Intel is consolidating its test operations. Activities currently conducted in Costa Rica will be relocated to existing sites in Vietnam and Malaysia. This strategic shift aims to streamline operations and optimize resource allocation across its global network.
Lip-Bu Tan stated that Intel’s past capacity investments were “excessive and unwise.” He emphasized that future capacity growth would be based on “volume commitments and tangible milestones.” This reflects a more disciplined approach to capital expenditure and expansion, tying investments directly to confirmed demand and project progress.
Ex-Intel CEO Pat Gelsinger has a new mission for AI
The company is also further delaying its $28 billion chip factory in Ohio. This facility was initially slated to commence operations in 2025 and had already experienced a previous delay in February 2025. The ongoing deferral of this substantial investment underscores Intel’s reassessment of its large-scale manufacturing expansion plans.
Lip-Bu Tan assumed the role of Intel CEO on March 12, 2025. His strategic initiative focuses on eliminating inefficiencies within the company. This plan involves selling off non-core business units and implementing measures to streamline overall operations. These actions are part of a broader effort to optimize Intel’s financial performance and operational agility.
Intel has also undertaken significant workforce reductions as part of its restructuring efforts. The company reduced its workforce by approximately 15% and aims to conclude the year with a total of 75,000 employees. This reduction follows a period where Intel had 108,900 employees at the end of 2024, a decrease from 124,800 employees at the end of 2023.
The restructuring included a significant reduction in management layers. Intel eliminated 50% of its management hierarchy through recent layoffs, indicating a move towards a flatter organizational structure. In June 2025, Intel announced additional layoffs, affecting between 15% and 20% of workers within its Intel Foundry unit, specifically targeting employees in that division.
