Updates source in paragraph 1, adds executive quote in paragraph 5

Feb 28 (Reuters) - Intel's INTC.O promised $28 billion chip fabrication plants in Ohio are facing further delays, with the first factory in New Albany now expected to be completed only by 2030, the struggling chipmaker said on Friday.

The first factory will begin operations sometime shortly thereafter, between 2030 and 2031, the company said, extending its original timeline by at least half a decade.

Intel has been cutting capital expenses after its expensive bid to become a contract chip manufacturer for other companies, in a move to restore its lost glory, strained its balance sheet.

The changes were made so Intel can align its factory operation with market demand and "manage capital responsibly", Naga Chandrasekaran, general manager of Intel Foundry Manufacturing, said in a message to employees which was shared in a press release.

"We are taking a prudent approach to ensure we complete the project in a financially responsible manner."

The company's second Ohio factory will complete construction in 2031 and will begin running in 2032, Intel said.

Shares of the company were up more than 5% but later pared some gains to trade about 1% higher.

Local news outlet the Columbus Dispatch first reported on the delays earlier on Friday.

Last year, the company laid off 15% of its workforce, suspended dividend and initiated an extensive cost-savings plan involving massive cuts to its capital expenditure in the coming years.

Its finance chief David Zinsner told Reuters last month that the company's goal was to ensure operating expenses were at roughly $17.5 billion for 2025.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Maju Samuel, Shilpi Majumdar and Krishna Chandra Eluri)

((ArsheeyaSingh.Bajwa@thomsonreuters.com; +91 8510015800;))