By Adam Clark

Intel is laying off thousands of workers as it looks to stabilize its finances. However, the cuts raise questions about the chip maker's strategy under new CEO Lip-Bu Tan.

The company plans to cut 584 jobs in California, according to filings published by the state government. Intel has also increased planned layoffs in Oregon to a total of 2,392 from 529 previously, local media outlet The Oregonian reported late Friday, citing a state filing.

Intel didn't immediately respond to a request for comment. The chip maker's shares were down 1% at $23.21 in early trading Monday.

The cuts don't come as a huge surprise. Intel previously said it would remove some layers of management after a Bloomberg report suggested it would slash more than 20% of its workforce, but it hasn't confirmed the total numbers.

However, the California and Oregon layoff notices suggest hundreds of engineers and technicians are among those set to lose their jobs.

Tan -- who was appointed CEO in March -- has yet to give a detailed plan for his strategy on how to manage the company's costly chip-manufacturing ambitions and balance them with its chip-design business. Under him, Intel has already lowered its operating expense target this year by $500 million and said it expects a further $1 billion reduction next year.

Intel is aiming to attract major artificial-intelligence chip designers such as Nvidia and Broadcom to use its new 18A chip-manufacturing process, which it hopes will make it competitive against rival Taiwan Semiconductor Manufacturing. A Reuters report earlier this month suggested the company might largely sideline marketing the 18A process to external clients in favor of putting more resources into its next-generation 14A process.

Analysts at KeyBanc said in a research note on Sunday that the reported plan to skip 18A seems unlikely, as the process appears to be competitive with Taiwan Semiconductor's current manufacturing technology and 14A isn't expected to reach mass production until late 2027 at the earliest.

Intel declined to comment on the Reuters report at the time. It is hoping that producing its own Panther Lake chips on the 18A process this year will both show off the success of its chip-manufacturing technology and help it take back market share from rival Advanced Micro Devices.

"We have indicated 'light' at the end of the tunnel, but it is a long tunnel and we remain on the sidelines given Intel's challenged fundamentals across both the Product and Foundry businesses, which may be further exacerbated by tariff-related headwinds," wrote UBS analyst Timothy Arcuri in a research note on Sunday.

Arcuri expects Intel to report earnings per share of four cents on revenue of $12.28 billion for the June quarter, when it reports earnings on July 24. That is slightly ahead of consensus expectations of earnings of two cents a share on revenue of $12 billion.

Arcuri kept a Neutral rating on the stock but raised his target price to $25 from $21.

Write to Adam Clark at adam.clark@barrons.com

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July 14, 2025 10:03 ET (14:03 GMT)

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