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Intel Slashes $1.5B in Expenses, More Layoffs Coming

Intel has announced cuts of $1.5 billion through 2026, with layoffs expected as part of the initiative.

Apr 29, 2025

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Intel has announced a significant cost-cutting initiative to slash operating expenses by $500 million this year and an additional $1 billion in 2026. As a result of its first-quarter earnings report, the chipmaker is saying these cuts are part of a broader effort to “drive improved execution and operational efficiency.”

This most likely means layoffs, though no number was disclosed. The Santa Clara-based tech giant explained that these reductions are in line with its strategy to create a leaner organization by removing management layers and speeding up decision-making processes.

Sweeping cost-cutting measures

In an open letter published to the company website, Intel CEO Lip-Bu Tan told employees that “…there is no way around the fact that these critical changes will reduce the size of our workforce.” Tan stepped into the CEO role just last month.

“We are going to be very intentional about where we focus these efforts and how we stack up against the best in the industry,” Tan said. “We have learned some valuable lessons from past actions. We must balance our reductions with the need to retain and recruit key talent. I will empower each of my leaders to make the best possible decisions aligned with our top priorities. These decisions will not be made lightly, and we will keep you regularly informed.”

Bloomberg reported on Tuesday that Intel was planning to cut 20 percent of its workforce. In its earnings report, Intel confirmed that operating expenses will be reduced across research and development as well as marketing, general, and administrative areas—all leading to restructuring changes. The company admitted it hasn’t yet calculated the total financial impact of these cuts.

While the first-quarter results were “a step in the right direction,” Tan acknowledged, “there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth.”

Flattening an “eight layers deep” organization

Tan stressed that, despite cutting 15,000 jobs last year under former CEO Gelsinger, Intel still needs to get more ruthless and cut costs further to fund critical engineering and technology investments, saying expenses remain well above industry standards. He is now having executives essentially flatten the organizational structure by getting rid of excess management layers—some teams are currently eight levels deep, he said—while increasing spans of control and elevating top performers as part of his engineering-focused strategy.

Intel has adjusted its financial targets, lowering its non-GAAP operating expense goal to around $17 billion for this year, down from the previously announced $17.5 billion. Looking ahead to next year, the company is aiming for $16 billion.

Read more about Lip-Bu Tan’s appointment as the new CEO of Intel, and other notable recent leadership changes here.

Allison Francis

Allison is a contributing writer for Channel Insider, specializing in news for IT service providers. She has crafted diverse marketing, public relations, and online content for top B2B and B2C organizations through various roles. Allison has extensive experience with small to midsized B2B and channel companies, focusing on brand-building, content and education strategy, and community engagement. With over a decade in the industry, she brings deep insights and expertise to her work. In her personal life, Allison enjoys hiking, photography, and traveling to the far-flung places of the world.

Intel Slashes $1.5B in Expenses, More Layoffs Coming

Sweeping cost-cutting measures

Flattening an “eight layers deep” organization

Allison Francis

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