Intel Stock Plunges 8% as Foundry Business Falters Amid Canceled Projects, Layoffs, Leadership Shakeup, and Customer Shortage
Intel, once a household name as the top chip manufacturer continues to struggle amongst slow sales. As the new Intel CEO Tries to Fix Company, Wall Street is expecting for things to get worst before they get better. For employees, this is bad news for them as the semiconductor chips company is set to layoff 25,000 employees by the end of the year.
Intel shares dropped sharply by 8% on Friday after the company revealed significant setbacks in its foundry business, including the cancellation of key projects, customer attrition, and a new wave of layoffs. The announcement adds to growing concerns about the chipmaker’s direction under CEO Lip-Bu Tan, who is under increasing pressure to turn the company around following a series of high-profile missteps.
Why is Intel in Trouble
Earnings Miss and Stock Drop
Intel posted revenue of $12.86 billion, exceeding analyst estimates, but reported an adjusted loss of $0.10 per share and a steeper GAAP loss due to restructuring expenses. Investors responded unfavorably as concerns mounted over the company’s cost discipline and strategic direction.
Intel Foundry Ambitions Hitting a Wall
Intel’s foundry unit, once positioned as a cornerstone of the company’s comeback strategy against Asian rivals like TSMC and Samsung, has hit a major roadblock. Several high-profile clients have pulled back or canceled orders altogether, citing delays, technical challenges, and cost concerns.
Intel’s foundry division, which generated roughly $4.4 billion in Q2 of 2025, showed modest year-over-year growth but remains unprofitable and lacking key external customers. Tan warned that without securing major external commitments for its next-generation 14A process, Intel may ultimately exit advanced chip manufacturing altogether.
Intel CEO Tries to Fix Company by Announcing Layoff of 15% of Its Work Force
Thursday, Tan said in a press release that the plans to cut their workforce by 15% is almost done. As part of a dramatic restructuring, Intel announced plans to reduce its global workforce from approximately 96,400 (end of 2024) to about 75,000 by year-end, representing a 15–22% cut, depending on the calculation. Nearly 21,000–24,000 jobs are expected to be eliminated through layoffs and attrition.
The layoffs come as Intel grapples with continued losses from its foundry segment and underwhelming demand for some of its newer offerings. In Q2 2025, Intel reported a GAAP operating loss of $1.4 billion, much of it attributed to restructuring costs. The company has also seen diminishing returns on investments in fabs that have yet to attract sufficient third-party clients.
Tan described the cuts as “difficult but necessary,” signaling a shift toward leaner operations focused on profitability over expansion.
Intel Project Cancellation
In a sharp reversal of its recent global expansion push, Intel has canceled or delayed several key chip manufacturing projects in Europe and the U.S., signaling a significant retreat from earlier ambitions to challenge Asian chip foundries on scale and capacity.
According to Marketing industry News reports from Barron’s and The San Francisco Chronicle, Intel will cancel plans to build new semiconductor fabrication plants in Magdeburg, Germany, and Wrocław, Poland. These two European sites had been heavily promoted by previous leadership as part of Intel’s effort to reshore chip production and capitalize on EU subsidies. However, escalating costs, shifting demand, and a lack of clear external customers led CEO Lip‑Bu Tan to pull the plug.
In addition, Intel is slowing construction of its Ohio “megafab” campus, once touted as the company’s “Silicon Heartland” initiative. Originally announced in 2022 with an estimated $20 billion budget, the site was designed to house advanced foundry production for both internal and external clients. But with those clients failing to materialize and foundry losses mounting, the project has now been deprioritized.
These strategic cuts reflect a broader realization that Intel’s current foundry model is not economically sustainable without guaranteed long-term contracts. Tan’s leadership is pushing a more conservative approach: no new construction unless there’s proven demand.
“There are no more blank checks,” Tan told employees in an internal memo. “Every investment must make economic sense.”
Intel Investor Response Leads to an 8% Drop in Stock
Investors initially welcomed the layoffs as a step toward restoring margins, but concerns remain over whether Intel can maintain its innovation pipeline while shrinking its workforce so drastically. Analysts say the company risks losing top talent to rivals like AMD, Nvidia, and TSMC if it fails to clearly communicate its long-term vision.
“You can’t cut your way to innovation, but you can cut your way to survival,” said Patrick Moorhead, chief analyst at Moor Insights & Strategy.
Intel maintains that the job cuts are designed to eliminate inefficiencies and not core capabilities. Furthermore, they insist that key growth areas like AI, networking, and PC processors will remain fully resourced.
