Chip maker Intel on Thursday announced it plans to lay off more than 15,000 workers after it lost more than $1 billion in revenue in the second quarter. 

In a press release published Thursday, Intel said it is downsizing its workforce by over 15% as part of a new $10 billion cost savings plan for 2025. The company employs about 116,500 people, which means at least 15,000 workers are set to lose their jobs.

The majority of the layoffs will be completed by the end of 2024 and will be targeted, Intel said. It is unclear which departments would be affected by the layoffs, but Intel hinted that it will reduce its R&D and marketing spend as well as restructure to "stop non-essential work."

"This is painful news for me to share. I know it will be even more difficult for you to read. This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company's history," CEO Pat Gelsinger said in a memo. 

"These decisions have challenged me to my core, and this is the hardest thing I've done in my career. My pledge to you is that we will prioritize a culture of honesty, transparency and respect in the weeks and months to come," he added. 

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What Led to the Layoffs

The layoffs come after Intel reported a loss of $1.6 billion for the second quarter of 2024. That followed a loss of $437 million in the first quarter.

"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," Gelsinger said.. "Our revenues have not grown as expected - and we've yet to fully benefit from powerful trends, like AI."

Intel has struggled to keep up with competitors over the past several years. The company previously attempted and failed to establish itself in mobile devices. It also lost ground in PCs and data centers to Advanced Micro Devices (AMD). It is now trailing behind Nvidia in artificial intelligence. 

That being said, Intel is set to receive $8.5 billion in grants and $11 billion in loans from the Biden administration to help bring manufacturing operations back to the US.

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