Intel is cutting more jobs as CEO Tan tries to fix manufacturing missteps
But Tan on Thursday signaled that he had taken charge of the company and was trying to wrest it back from what he viewed as previous missteps.
"There are no more blank checks," Tan wrote in a memo to employees. "Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution." But shares still fell 4.5% in extended trading after the company forecast steeper third-quarter losses than Wall Street estimated. Tan also told analysts on a conference call that he believes Intel's so-called 18A manufacturing process - in which his predecessor Pat Gelsinger had deeply invested - could generate a reasonable return only if it is used for Intel's own products. Reuters reported earlier this month that Tan is debating whether to quit offering that technology to external customers.
As part of the job cuts, Intel attempted to take a 'surgical' approach and remove layers of middle management, finance chief David Zinsner told Reuters. 'We took out about 50% of the layers of the company,' he said.
The company is cutting its workforce by 15% from 96,400 that it reported at the end of June. It plans to further reduce headcount to 75,000 by the end of the year, down 22% from the end of 2024, which will be through attrition and "other means," according to the company.
TAN WILL REVIEW
"They may have overspent on 18A ... but I think this is the painted picture of a new fiscally disciplined base that they're going to go from here. I think that's the right approach," said Ben Bajarin, CEO of tech market analysis firm Creative Strategies.
In the memo to employees, Tan said Intel is changing its strategy for building manufacturing capacity and now plans to build factories only when the demand for its chips is there. Previously, the company had built factories ahead of demand in the U.S. and elsewhere.
Intel is now working to bring its 18A technology to high volume. Tan said in the memo that the company plans to take a disciplined approach to investments in the next-generation 14A manufacturing process, and in its quarterly securities filing, Intel said that if it fails to find a significant external customer for 14A, it may be forced to exit the chip manufacturing business.
Tan wrote the company now plans to slow construction work on new factories in Ohio and halt planned factories in Poland and Germany, and consolidate chip packaging operations in Costa Rica with its other packaging operations in Vietnam and Malaysia.
"I do not subscribe to the belief that if you build it, they will come," Tan said on the call with analysts. He later added that he will personally review and approve each of Intel's major chip designs.
STEEP LOSSES
Intel said it expects a third-quarter loss of 24 cents per share, steeper than estimates of losses of 18 cents per share, according to data from LSEG. It expects revenue of $12.6 billion to $13.6 billion for the September quarter, with a midpoint of $13.1 billion that was higher than analysts' average estimate of $12.65 billion. While semiconductors are currently exempt from U.S. President Donald Trump's sweeping global tariffs, Intel and its fellow chipmakers are facing customers who are reluctant about spending commitments amid widespread macroeconomic uncertainty. Customers have pulled shipments forward to the first half of the year amid trade uncertainty.
Intel's second-quarter revenue for the period ended June 28 was flat at $12.9 billion, snapping a four-quarter streak of sales declines. The result beat estimates of $11.92 billion.
Intel said job cuts contributed to restructuring costs of $1.9 billion in the second quarter.
It recorded June quarter adjusted losses of 10 cents per share, compared with estimates of a profit of 1 cent per share. Its unadjusted loss was 67 cents per share in the second quarter, steeper than analyst estimates of a 26-cent-per-share loss.
(Reporting by Arsheeya Bajwa in Bengaluru and Max A. Cherney and Stephen Nellis in San Francisco Editing by Sayantani Ghosh and Matthew Lewis)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
a day ago
- Gulf Today
Spain's unemployment rate falls to lowest since 2008 to 10.29%
Spain's unemployment rate fell to 10.29 per cent in the second quarter of 2025 from 11.36 per cent in the preceding three months, data from the National Statistics Institute (INE) showed. The rate was at the lowest level since the first quarter of 2008, when it stood at 9.6 per cent, INE said. It also represents the lowest rate in a second quarter since 2007. Economists polled by Reuters had forecast that the rate would decline to 10.7 per cent. The April-June period tends to be the strongest quarter for employment in Spain, as the tourism sector usually sees high activity before the traditional summer slump hits other industries. After adding over 500,000 new jobs in the quarter, the country surpassed the milestone of 22 million formal workers for the first time. Labour Minister Yolanda Diaz told SER radio the data was very positive but called on employers to improve salaries, which she said were far below those of other European countries despite a high cost of living. Meanwhile Spain's trade deficit widened 42.46 per cent in the first five months of 2025 from the same period a year earlier, to 21.52 billion euros ($25.04 billion), the Economy ministry said on Friday. Imports over the period increased by 4.3 per cent to 184.91 billion euros, while exports rose 0.8 per cent to 163.38 billion euros, the ministry said. Spain's economy is a strong and developing one, characterized by its robust labour market, a growing focus on green energy, and increasing foreign investment. It is the 14th largest economy in the world by nominal GDP and the fifth largest in Europe. The country is a member of the European Union and the Eurozone, and it has a mixed capitalist economy with a strong service sector, particularly tourism, and a significant industrial base The Spanish government announced a €200 million ($232.03 million) financial package to bolster its investments in Mauritania, along with the launch of the digital platform 'Kantara' aimed at fostering direct connections between economic players in both countries. The announcement came following the conclusion of the first high-level session between Mauritania and Spain, which included the Mauritanian-Spanish Business Council, and was attended by Mohamed Ould Cheikh El Ghazouani, President of Mauritania, and Pedro Sánchez, Prime Minister of Spain. According to the Mauritanian Information Agency, the closing session featured pledges and investment commitments. In his remarks, Sanchez said the €200 million package will be channelled into loans for green projects, feasibility studies, risk mitigation instruments, and project implementation tools, particularly in the field of energy transition. He also announced that Spain will appoint its first economic and trade representative in Mauritania as of 1st September. President El Ghazouani emphasised that Mauritania offers a wide range of promising investment opportunities in key sectors such as fisheries, agriculture, livestock development, extractive industries, infrastructure - including roads, bridges, airports, and public buildings - as well as in services, gas, and mining. Earlier the Opec Fund for International Development (Opec Fund) and the Islamic Republic of Mauritania have signed a landmark Country Partnership Framework Agreement to cooperate on key development initiatives during the period 2025-2027, earmarking $120 million in new development financing focusing on the country's development priorities. The funding will finance critical projects that contribute to projects promoting renewable energy, clean water, food security, improved transport and clean cooking. In addition the Opec Fund is pledging to provide up to $500,000 in grants for capacity-building, project preparation and technical assistance. Opec Fund President Abdulhamid Alkhalifa said during a visit to the capital Nouakchott: 'We are proud to help improve the lives of people and communities for a more resilient future. Our commitment to Mauritania is focused on bolstering key sectors of the economy.' 'Technical assistance and strong project preparation are vital to mobilise additional development funding, enable public-private partnerships (PPPs) and attract private sector investment.' The Ministry of Economy and Tourism has signed two Memoranda of Understanding with the Spanish Patent and Trademark Office and the Moroccan Industrial and Commercial Property Office, aimed at strengthening cooperation in the development of intellectual property (IP) in the UAE in line with international best practices. The MoUs were signed in the presence of Abdullah Bin Touq Al Marri, Minister of Economy and Tourism, during the UAE delegation's participation in the Sixty-Sixth Series of Meetings of the Assemblies of the Member States of the World Intellectual Property Organisation (WIPO) in Geneva. Agencies
Al Etihad
2 days ago
- Al Etihad
China proposes global AI cooperation organisation
26 July 2025 08:42 SHANGHAI (REUTERS)Chinese Premier Li Qiang on Saturday proposed establishing an organisation to foster global cooperation on artificial intelligence, calling on countries to coordinate on the development and security of the fast-evolving at the opening of the annual World Artificial Intelligence Conference (WAIC) in Shanghai, Li called AI a new engine for growth, but adding that governance is fragmented and emphasising the need for more coordination between countries to form a globally recognised framework for three-day event brings together industry leaders and policymakers at a time of escalating technological competition between China and the United States - the world's two largest economies - with AI emerging as a key battleground."Currently, overall global AI governance is still fragmented. Countries have great differences particularly in terms of areas such as regulatory concepts, institutional rules," Li said."We should strengthen coordination to form a global AI governance framework that has broad consensus as soon as possible," he has imposed export restrictions on advanced technology to China, including the most high-end AI chips made by companies such as Nvidia and chipmaking equipment. Despite these restrictions, China has continued making AI warned that AI could become an "exclusive game" for a few countries and companies, and said challenges included an insufficient supply of AI chips and restrictions on talent exchange. China wanted to share its development experience and products with other countries, especially those in the Global South, he is an annual government-sponsored event in Shanghai that typically attracts major industry players, government officials, researchers and investors. Tesla CEO Elon Musk has in past years regularly appeared at the opening ceremony but did not speak this than 800 companies are participating, showcasing more than 3,000 high-tech products, 40 large language models, 50 AI-powered devices and 60 intelligent robots, according to organisers. The exhibition features many Chinese companies, including tech giants Huawei and Alibaba and startups such as humanoid robot maker Unitree. Western participants include Tesla, Alphabet and Amazon.
Dubai Eye
2 days ago
- Dubai Eye
India-UK trade deal signals Modi's priorities as New Delhi eyes EU, US pacts
India's trade deal with Britain is a sign of New Delhi's new gradual shift to opening up its markets while shielding crucial sectors from competition and could be its template for future agreements, government officials and analysts said on Friday. Signed on Thursday and hailed by Prime Minister Narendra Modi as "a blueprint for our shared prosperity", the deal with the UK represents India's biggest ever strategic partnership with an advanced economy. It comes at a time rising global trade tensions and at a pivotal moment for India's historically protectionist trade strategy, as the Asian giant looks to strike similar deals with partners including the EU, US and New Zealand. Under the pact, India notably agreed to cut tariffs on imported British vehicles, opening up competition for a domestic industry that makes up nearly 7 per cent of the Indian economy. "This is a policy shift, especially as India has long used high tariffs to protect domestic manufacturers," Ajay Srivastava, founder of Global Trade Research Initiative and a former Indian trade negotiator, told Reuters. The easing of its protectionist stance also applies to government procurement and pharmaceuticals and will likely be replicated in deals with Brussels and Washington, he added. But it remains a cautious shift. Under the UK deal, auto imports will be capped under a quota system to shield local manufacturers, and tariff reductions will be gradual. India has committed to reducing auto tariffs from over 100 per cent to 10 per cent over 15 years, within an annual import quota starting at 10,000 units and rising to 19,000 in year five. Tariff reductions on whisky and other goods will also be phased over several years to allow domestic industries to adjust. RED LINES India has stuck to its red lines in the deal, making no concessions on agricultural items such as apples and walnuts or dairy products including cheese and whey. "There is no question of opening up the agriculture or dairy sector in any trade negotiation - be it with the EU, Australia, or even the US," a senior Indian official said. The calibrated strategy aims to leverage trade for economic growth, the official said, but the government will continue to shield millions of Indians dependent upon subsistence farming and low-margin work. Indian farmers are eyeing broadened access to the UK's $37.5 billion agriculture market under the deal. And Indian exporters will benefit from zero tariffs on goods including textiles, footwear, gems, furniture, auto parts, machinery, and chemicals. "With zero tariffs, India's garment exports to the UK could double in three years," said N. Thirukkumaran, general secretary of the Tiruppur Exporters Association. "This also paves the way for the EU agreement, which could bring even bigger gains," he added. But the strategy could face a major test in negotiations with US President Donald Trump's administration, which has used the threat of steep tariffs to pressure trading partners into making concessions. Trade Minister Piyush Goyal told Reuters on Thursday that India is also hopeful of reaching a trade agreement with Washington that includes "special and preferred treatment". But the US is pushing for greater access to India's agricultural and dairy markets.
