Intel’s new CEO faces a tough start as losses deepen in Q1 2025 and job cuts loom
Despite moves to tighten operations and boost liquidity, Intel faces a steep road ahead.
Chipmaker, Intel reported first-quarter results that beat analysts’ expectations, but some of the key metrics were underwhelming.
For the quarter ending March 31, Intel reported a net loss of $800 million, or 19 cents per share — double the $400 million loss from a year earlier — while revenue stayed flat at $12.7 billion. A contrast of what its competitor TSMC, reported during the same period.
CFO David Zinsner pointed to a volatile macroeconomic environment, warning that the turbulence is likely to persist. Intel’s Client Computing Group, which produces PC chips and remains its largest division, also saw revenue drop 8% year-over-year to $7.6 billion.
Emmanuel Oyedeji
However, there were pockets of growth. Intel’s Data Centre and AI business grew 8% year-over-year, fueled by demand for AI server CPUs. Meanwhile, its Foundry division also grew a 7% revenue boost driven by orders for Intel 7 wafers and advanced packaging services. Intel warned that revenue in both units is expected to decline sequentially in the second quarter, signalling that Intel’s rebound is still far from secure.
Looking ahead, Intel forecast second-quarter revenue between $11.2 billion and $12.4 billion, well below Wall Street’s expectations and underscoring the challenges facing the company.
CEO Lip-Bu Tan, who stepped into the top job earlier this year, is moving quickly to rein in spending. As such, Intel plans to cut capital expenditures for 2025 from $20 billion to $18 billion, with operating expenses targeted to fall to $17 billion this year and $16 billion by 2026.
The internal shake-up could be even more significant. Although Intel has not confirmed reports of potential layoffs affecting up to 20% of its workforce, it has made clear that job reductions and a streamlining of its organisational structure are underway.
The company is also scaling back its broader ambitions. Intel announced it would delay the opening of two new fabrication plants in Ohio to the early 2030s, citing shifting market conditions. It also reversed earlier plans to spin off Intel Capital, its venture capital arm, opting instead to selectively invest and monetize its portfolio. Meanwhile, Intel expects to bring in $4.4 billion from the sale of a 51% stake in Altera to Silver Lake Panthers, retaining a minority position.
Despite moves to tighten operations and boost liquidity, Intel faces a steep road ahead. The company ended 2024 with an $18.8 billion loss and continues to grapple with fierce competition, evolving technology demands, and mounting global economic uncertainty. The Sino-US trade wars and tariff drama only add to the difficulty of forecasting a recovery.
For now, Intel’s comeback remains a work in progress, and investors are left waiting for real signs of momentum.
Emmanuel Oyedeji
