Intel Reports 81% Increase in Net Losses, Cuts Workforce by 15%

Intel Corporation, a prominent semiconductor manufacturer, experienced a significant financial downturn in the second quarter of 2025. The company reported a net loss of $29 billion, a substantial increase from the $16 billion loss reported in the same period last year. This marks an 81% year-over-year expansion in net losses. The adjusted net loss for the quarter was $4 billion, compared to a net profit of $1 billion in the previous year.

The company's revenue for the quarter was $128.6 billion, which was nearly flat compared to the same period last year but exceeded market expectations. Despite the revenue performance, the company's adjusted gross margin fell to 29.7%, down from 38.7% in the previous year. This decline was attributed to various factors, including a 3% decrease in revenue from the Client Computing Group (CCG), which is responsible for selling personal computer processors, reflecting a weak PC market demand. The Data Center and AI Group (DCAI) saw a 4% increase in revenue, driven by the growing demand for AI server chips. The Foundry Services business, which includes Intel's contract manufacturing operations, reported a 3% increase in revenue but incurred an operating loss of $31.7 billion, a 46% increase from the previous year.

Intel's strategic response to these financial challenges includes significant cost-cutting measures. The company announced plans to reduce its workforce by 15% by the end of the year, aiming to streamline operations and improve efficiency. Additionally, Intel has decided to halt the construction of new chip factories in Europe, which were part of a previously announced investment plan. This decision is part of a broader strategy to focus on more economically viable projects and to align investments with actual market demand.

The company's leadership, under the guidance of its new CEO, is focusing on restructuring the organization to enhance operational efficiency and strengthen accountability at all levels. The CEO emphasized the need for a more cautious and demand-driven approach to capacity expansion, acknowledging past overinvestment in production capabilities that did not align with market needs. The company is also prioritizing the development of AI-related products, particularly those that support complex decision-making and task execution. Intel aims to introduce new AI chips in the coming years, leveraging its latest technologies to capture a significant share of the rapidly growing AI market.

Looking ahead, Intel has provided a cautious outlook for the third quarter. The company expects revenue to range between $126 billion and $136 billion, with a projected gross margin of 34.1% and an expected loss of $0.25 per share. This outlook is slightly below market expectations, reflecting the ongoing challenges and the company's focus on restructuring and cost management.