New Delhi: Intel has started a fresh round of layoffs, and this time it’s not small. Thousands of jobs are being cut across the United States, with employees in California, Oregon, and Texas among the hardest hit. The layoffs are part of a major restructuring effort under CEO Lip-Bu Tan, who has openly admitted the company has fallen behind in the AI race.
According to The Register, hundreds more jobs have been slashed at Intel’s foundry operations in Israel. The cuts are primarily targeting back office and manufacturing support roles, as Intel attempts to redirect its focus toward newer AI and edge computing goals. This shift comes in response to mounting losses and poor performance in Intel’s chip-making business, which has lagged far behind rivals like NVIDIA and AMD.
CEO says Intel is not in the top 10
In a recent internal message shared with employees, Lip-Bu Tan said Intel is “not in the top 10 semiconductor companies” when it comes to AI. He added that it’s already “too late” to build in-house large language models that can compete with what NVIDIA has achieved using its own high-end chips and infrastructure.
As per Oregonlive, Tan’s statement signals a sharp departure from Intel’s earlier ambitions under former CEO Pat Gelsinger, who had focused heavily on catching up with competitors in AI and chip fabrication. That plan, however, never really took off. Gelsinger was removed earlier this year, and Lip-Bu Tan has since taken charge with a more pragmatic tone and a tight cost-cutting strategy.
Cost cuts and refocus on local AI
Under the new leadership, Intel is aiming to cut its expenses by nearly $1.5 billion (about ₹12,975 crore). These cuts are expected to shrink the company’s workforce by nearly 20 percent. According to Tom’s Hardware, the broader strategy is to move away from data centre-driven AI models and instead double down on AI that runs on devices locally, known as agentic or edge AI.
The idea is to prioritise AI that works on local hardware like laptops, PCs, and mobile devices, instead of expensive cloud-based AI training which NVIDIA dominates. Tan wants to return Intel to being a “world-class products company,” but he has admitted it will be a “marathon” to recover lost ground.
Big problems, big names
Intel’s situation is becoming a cautionary tale in the chip world. Once seen as untouchable, the company now finds itself playing catch-up in the one area that matters most in 2025: artificial intelligence. NVIDIA, under Jensen Huang, is racing ahead with hardware tailored for AI. Even AMD has managed to keep pace in several segments.
Huang recently responded to the growing concerns around AI replacing jobs, saying it’s unlikely AI will cut “half” of all white-collar jobs, especially in the entry-level bracket. But for Intel’s laid-off workers, especially those in admin, support, and foundry roles, the current AI wave already feels like a job-cutter.
The road ahead
With restructuring in motion, Intel is betting on new talent and a trimmed-down approach to find a fresh direction. New executive hires have been brought in to speed up this pivot, and the company is expected to announce more operational changes in the coming months.
But Tan has made one thing clear. The race with NVIDIA is already lost for now, and the goal is no longer to win that race. Instead, Intel is trying to find a new lane to run in.