Intel, one of the world’s leading chipmakers, has announced layoffs alongside significant restructuring plans in response to ongoing financial difficulties. The company will lay off over 15,000 employees, representing more than 15% of its workforce, as part of a broader $10 billion cost savings initiative for 2025.

The announcement comes as Intel reported a substantial loss of $1.6 billion in Q2 2024, primarily attributed to its Foundry business and ongoing investments. This loss marks a significant increase from the $437 million loss reported in the previous quarter.

The restructuring plan announced by Intel encompasses several key elements aimed at streamlining operations and reducing costs. The company plans to lay off over 15,000 employees, with most cuts to be finalized by the end of 2024. Additionally, Intel will implement significant cost-cutting measures, including reducing R&D and marketing expenditures by billions annually through 2026 and decreasing capital expenditures by more than 20% this year. The plan also involves operational changes, with Intel restructuring to eliminate non-essential work and conducting a comprehensive review of all active projects and equipment to optimize spending.

Intel CEO Pat Gelsinger acknowledged the disappointing financial performance in Q2, noting that revenues have not grown as expected and the company has yet to fully capitalize on emerging trends like AI. While Intel’s Foundry business has been a significant source of losses, with $7 billion in operating losses in 2023 and another $2.8 billion this quarter, the company’s core product sales remain relatively stable. The PC and server businesses continue to be profitable, despite recent challenges.

Despite the layoffs, Intel maintains its commitment to core investments in executing its strategy and building a resilient semiconductor supply chain in the U.S. and globally.