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Intel is planning to make significant changes, including cutting its capital expenditures and removing managers, as the US chipmaker navigates a turnaround under its new CEO and deals with President Trump’s trade war with China.
The company announced on Thursday that it will be “streamlining the organization, eliminating management layers, and enabling faster decision-making” as part of its plan.
Despite these changes, Intel provided a more pessimistic outlook for the current quarter, citing the impact of the Trump administration’s tariffs on the semiconductor industry. The company expects adjusted revenue of $11.2bn to $12.4bn for the quarter, below analysts’ expectations.
Following the announcement, Intel’s shares dropped more than 5% in after-hours trading.
This comes as Intel faces challenges in competing with companies like TSMC in semiconductor manufacturing and Nvidia in the AI data center chip market. The company has also struggled to gain market share in the PC chip space.
Since Lip-Bu Tan took over as CEO in March, Intel has been undergoing significant changes. Tan has promised a “cultural change” at the company and has decided not to spin off Intel Capital, as previously announced.
Additionally, Intel will be implementing a return-to-work policy requiring employees to be on-site four days a week by September 1. The company is also reducing its operational expenses and capital expenditures targets for 2025.
Despite these challenges, Intel reported adjusted revenue of $12.7bn for the first quarter of 2025, with a widened net loss.
The company is also facing uncertainty regarding the US government’s obligations in the chip agreement, which could impact its net capital expenditures for the year.
Overall, Intel is navigating a challenging landscape as it looks to position itself for future success in the semiconductor industry.