Intel announces layoffs and cuts capex to $18B as turnaround under Lip Bu Tan begins
Apr 25, 2025
Key Points
- Intel posts a quarterly loss and announces layoffs stretching into mid-2025 as new CEO Lip Bu Tan begins a broad cost restructuring.
- Capital spending cuts to $18 billion from $20 billion signal a pullback from manufacturing expansion, now lower than Google's quarterly capex.
- Revenue guidance of $11.8 billion misses Wall Street's $12.8 billion forecast, with personal computing down 8% offsetting 8% gains in data center and AI.
Summary
Intel posted a quarterly loss and announced layoffs beginning in Q2 2025 that will stretch over several months without specifying headcount. New CEO Lip Bu Tan is executing a broad cost restructuring. Operating expenses will drop by $500 million this year and a further $1 billion in 2026. Capital spending is being cut by $2 billion to $18 billion for the year, a sharp pullback from the manufacturing expansion under predecessor Pat Gelsinger. Intel's annual capex is now lower than what Google spends per quarter.
Revenue guidance disappointed. Intel forecast roughly $11.8 billion for the current quarter versus Wall Street's estimate of around $12.8 billion. Some near-term softness stems from tariffs, which created a pull-forward effect as customers rushed to buy ahead of expected price increases. Finance leadership said tariffs would increase costs and the broader market would contract as consumers and businesses face economic uncertainty.
Data center and AI chips posted 8% sales growth. Personal computing, Intel's largest segment, fell 8% to $7.6 billion. The foundry business reported $4.7 billion in revenue, up 7%.
Stock fell about 7% in after-hours trading. Tan is betting that shrinking revenue, cutting jobs, and reducing investment near term will position Intel to emerge leaner and more competitive. The company is essentially telegraphing two quarters of minimum uncertainty to the market.