Intel Corp., formerly an advanced chip manufacturer currently is trying to rise from the darkness of the problems of recent years and return to the shining heights of leadership in the microcircuits industry, which is more vital than ever at the present stage of global technological progress, has published a weak forecast for the expected results of its activities and posted an obviously not optimistic news about cutting workers to bring costs in line with a smaller-size business.
The mentioned company, which is seeking to revive under new chief executive officer Lip-Bu Tan, expects its revenue for the second quarter of 2025 to range from $11.2 billion to $12.4 billion. The corresponding forecast was published on Thursday, April 24. It is worth noting that the consensus estimate of analysts polled by the media provided that Intel’s revenue for the second quarter of the current year would be fixed at the $12.9 billion mark. Against the background of a disappointing forecast from the chip manufacturer and a wide range of products in some other categories, the value of the company’s shares in late trading showed a drop of more than 6%.
Reporting on the firm’s results for the first quarter of the current year, Lip-Bu Tan said that he would soon put his stamp on Intel. The head of the company also announced his intention to energize the culture, which, in his opinion, has become too bureaucratic. It is possible that this statement reflects the confidence of the current management of the firm that the failures of recent years are largely related to the specifics of the concept of Intel’s internal functioning as an autonomous organization. Whether such an opinion is true will become known after concrete measures are taken to reduce the bureaucratic dimension of the company’s existence.
Intel also stated that the cost-cutting plan will involve eliminating management layers. The company expects that the implementation of this intention will generate a state of affairs within the framework of the firm’s activity process that will allow for faster decision-making.
Intel does not yet have an estimate for the one-time expenses associated with the cuts. At the same time, there are already tentative expectations that the company’s operating costs will decrease to about $17 billion in the current year. Next year, the corresponding figure will decline to $16 billion. At the same time, this is a preliminary forecast, not a definitively approved goal that Intel will strive to achieve.
At the current week, the media published information according to which the company intends to lay off more than 20% of its employees.
The report released Thursday on Intel’s earnings in the first quarter of 2025 is the first under the leadership of Lip-Bu Tan, a chip industry veteran who took the job last month. The board hired him after predecessor Pat Gelsinger made every effort to restore the competitiveness of the company’s products. Mr. Gelsinger was ousted last year after sliding sales and mounting red ink ruined his comeback bid.
Intel’s revenue for January-March of the current year was recorded at the $12.67 billion mark. This indicator showed a decrease of 0.4% compared to the reading for the same period in 2024. At the same time, the result published on Thursday exceeded preliminary expectations. The consensus forecast of analysts surveyed by LSEG predicted that Intel’s revenue for the first quarter of 2025 would be $12.3 billion.
The chipmaker showed a performance that exceeded expectations, following Texas Instruments Inc. At the same time, Intel’s weak forecast for the second quarter of 2025 probably indicates that the growth in consumer demand for its products was what can be described as a kind of short-term phenomenon. In a symbolic sense, it was a flash of bright light in the twilight of a less optimistic reality. Intel’s revenue in the first quarter of 2025 was likely impacted by a rush of orders ahead of looming tariffs being threatened by the United States, China, and others. A trade war is gradually starting, which is probably to have a significant impact on the company’s performance. The current moment may turn out to be somewhat of a crisis for Intel since in this case there is a possibility that some kind of merger will occur between the unfavorable internal reality of the firm and the pessimistic conditions and circumstances of the external environment. The tariff confrontation between Beijing and Washington, which has already effectively become a kind of status quo, limits and may further more limit the ability of companies based in the United States to interact with the vast Chinese market. For the mentioned firms, this means financial losses.
Intel chief financial officer David Zinsner stated that the current macro environment generates elevated uncertainty across the industry, which is reflected in the company’s outlook. He also noted that the firm adheres to a disciplined and prudent approach to support continued investments in core products and foundry businesses while maximizing operational cost savings and capital efficiency.
Moreover, David Zinsner stated that he does not currently have an estimate for the size of the workforce reduction.
In a separate memo to employees, Lip-Bu Tan noted that he wants to revamp the company’s culture. In this case, among other things, it means requiring staff to work in-person for four days a week starting on September 1. The head of Intel said that the current firm’s policy is that hybrid employees should spend approximately three days per week on site. According to him, adherence to this policy has been uneven at best. He strongly believes that the company’s sites need to be vibrant hubs of collaboration that reflect its culture in action.
Lip-Bu Tan also noted that layoffs will begin in the present quarter. According to him, the company must balance its reductions with the need to retain and recruit key talent. He stated that the relevant decisions would not be taken lightly.
Lip-Bu Tan has yet to answer Wall Street’s questions on how he intends to resurrect Intel’s fortunes, both at the level of rhetoric and in practical terms. The coming years are likely to be momentous for the company in some ways. Intel will have to demonstrate what it is ultimately capable of. In the chip manufacturing industry, the company should prove that it can be an advanced competitive player, rather than remain a brand with a reputation formed in the past and is not a real reflection of the strength and capabilities in the present. The new era forms new challenges, which can be ignored, but this is a path towards the other side of life, where, in a symbolic sense, memories that are in practical terms incapable of even minimal action arrange a feast. It is important for the company not to reach the point beyond which a kind of paralysis of the ability to move forward begins, which is a severe and irreversible consequence of what can be called a manufacturing and technological stroke.
Pat Gelsinger focused on Intel’s factory network. In the past, this network was the company’s most powerful asset. He planned to spend tens of billions of dollars to ensure that Intel received the best production technologies in the world. His intentions also envisioned luring rivals into using the firm as an outsourced provider of manufacturing.
Lip-Bu Tan, describing the results achieved by the company in the first quarter of 2025, stated that this period was a step in the right direction. At the same time, he noted that there are no quick fixes. According to him, the company is currently working to get back on a path to gaining market share and driving sustainable growth. The Intel chief executive officer also stated that he is taking swift actions to drive better execution and operational efficiency while empowering engineers to create great products. According to him, the company is going back to basics by listening to its customers and making the changes needed to build the new Intel. In fact, these statements acknowledge that the company needs a radical internal transformation. Over time, it will become known whether Intel, in the world of technology and advanced manufacturing, will be able to become a symbolic analog of the mythical Phoenix bird, which has the superpower of rebirth from the ashes.
The company has cost issues, but this is not the only item on the list of challenges that it faces. Intel has actually missed a chance to become a leader in the semiconductor industry. Such chances are extremely rare. In this case, it means the explosion of artificial intelligence computing. Currently, the era of AI has actually formed as a kind of the objective being and has become the main component of the content of reality in its technological dimension. Companies that do not interact in one form or another, on one scale or another, with the artificial intelligence sector have maximum risks of being on the sidelines of both general progress and personal development. Intel could become an advanced supplier of chips that are critically needed for training and ensuring the subsequent operation of machine intelligence systems. However, the company has ceded this place under the sun to Nvidia Corp.
Over the past few years, investors have literally avoided Intel shares. In 2025, the securities demonstrated what can be described as a recovery. The value of Intel’s shares has increased by 7.2% since the beginning of the current year. The Philadelphia Stock Exchange Semiconductor Index at the same time fell by almost 16%.
In the first quarter of 2025, Intel had a loss of 19 cents a share. At the same time, analysts interviewed by the media estimated a loss of 22 cents per equity on sales of $12.31 billion.
In 2024, Intel’s annual revenue decreased by about $26 billion compared to the peak recorded in 2021. Currently, the company’s revenue is less than half of Nvidia’s figure. Moreover, the analysts who were interviewed by the media, do not predict a rapid growth of the corresponding indicator.
Intel’s chief financial officer said the company shares Wall Street’s concern that a good start to the year may not reflect underlying demand. He also admitted that, perhaps, in this case, the factor of impact was stocking up ahead of tariffs.
Intel is concerned that consumer spending and investments in areas such as data center infrastructure may decline. It was also noted that the uncertainty regarding tariffs makes it difficult to predict the situation in the environment.
Intel’s chief financial officer said the company is focused on improving its balance sheet and is cutting the budget for new plants and equipment by a further $2 billion. The firm plans to focus on a small number of areas and sell off units that are unrelated to the corresponding efforts.
Intel’s foundry business, which manufactures chips for outside customers, generated revenue of $4.67 billion in the first quarter of 2025. This indicator showed an increase of 7.1% year-on-year.
Personal computer chip sales generated a company revenue of $7.63 billion in the first quarter of 2025. This figure fell by 7.8% compared to the reading recorded in the same period last year.
Intel’s data center and artificial intelligence chip unit earned $4.13 billion in the first quarter of 2025. In this case, revenue increased by 8% year-on-year.
Intel’s adjusted gross margin, which is the percentage of sales remaining after excluding the cost of production, was 39.2% last quarter. The company expects this figure to decrease to 36.5% in the current quarter.
As we have reported earlier, Intel to Spin Off Non-Core Units.
