Intel Faces Major Layoffs Amid AI Race and Market Struggles

Intel is cutting more than 5,500 jobs in the US. Why? This announcement follows the company's report of significant financial losses in the first quarter of 2025. Net losses totaled approximately $887 million, and revenue declined by 3% compared to the same period last year. These results prompted CEO Lip-Bu Tan to announce a major restructuring aimed at simplifying the company's management and improving efficiency. According to WARN documents, most of the cuts are expected to take place in California (1,935), Oregon (2,932), and Arizona (696).

Falling Behind in the Chip Industry

Once a leader in the semiconductor industry, Intel is now losing ground to competitors like NVIDIA, Samsung, IBM, and TSMC. The company has struggled to keep up with new chip manufacturing technologies, such as 3nm production, where rivals have already made significant progress. Intel's AI chip strategy has also failed to deliver the expected results, both in terms of performance and developer support. Meanwhile, NVIDIA has continued to dominate the AI hardware market.

Industry-Wide Shift Toward AI

Intel is not alone in this wave of transformation. Tech giants like Microsoft, Google, and Meta have also restructured their operations and shifted their focus to artificial intelligence. As the industry becomes increasingly competitive, companies are compelled to reduce costs and invest in next-generation technologies. Intel hopes that by streamlining operations and realigning its priorities, it can reclaim its position in the global chip market.