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Released August 04, 2025 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--
Chip giant Intel Corporation (NASDAQ:INTC) (Santa Clara, California) has announced the cancellation of two European manufacturing plant projects alongside plans to cut more than 24,000 jobs from its global workforce.
The company will no longer proceed with chip manufacturing plants in Magdeburg, Germany, and Wroclaw, Poland, each worth more than US$30 billion in planned investment. The job cuts represent almost a quarter of the company's 99,500-strong workforce and are significantly higher than previously announced plans to reduce workers by 15%. The cuts form part of the company's overall turnaround plan and come on the back of poor second-quarter financials, where it reported losses of US$2.9 billion on flat revenues of US$12.9 billion. In recent years, Intel has failed to capitalize on the rise of the artificial intelligence (AI) chip market, now dominated by graphics chipmaker Nvidia Corporation (Santa Clara, California), while its smaller, traditional chip rival AMD (Santa Clara, California) continues to make gains in the AI and data center markets.
"Over the past several years, the company invested too much, too soon -- without adequate demand," explained new Intel Chief Executive Officer Lip-Bu Tan. "In the process, our factory footprint became needlessly fragmented and underutilized. We must correct our course. With that in mind, we have decided not to move forward with previously planned projects in Germany and Poland. We also plan to consolidate our assembly and test operations in Costa Rica to our larger sites in Vietnam and Malaysia. Costa Rica remains a large and important Intel site that's home to key engineering teams and corporate functions.We remain deeply committed to investing in the U.S., where we will apply the same level of financial discipline. To that end, we are further slowing construction in Ohio to ensure our spending is aligned with demand -- while maintaining flexibility to accelerate based on new customer wins."
When first announced in 2023, Intel's Magdeburg investment plan of more than US$33billion was the largest-ever investment in Germany by an outside firm and was backed by US$11 billion in promised state subsidies. For additional information, see June 26, 2023, article - Intel Investing $33 Billion in German Chip Plants. The cancellation of the project has dealt a heavy blow to the European Union's (EU's) goal of increasing its share of global chip production to 20% (up from 10%) by 2030. In 2022, the EU introduced the European Chips Act, backed by 15 billion euro (US$17 billion) in additional public and private investment until 2030. This came on top of 30 billion euro (US$34 billion) of public investments that it had already planned. Within the act, the Chips for Europe Initiative set aside 11 billion euro (US$12.4 billion) to advance semiconductor projects. The planning process was also fast-tracked in Member States for new grassroot facilities and expansions of existing plants. For additional information, see February 21, 2022, article - Europe Enacts 'Chips Act' to Battle Semiconductor Shortages.
With regard to headcount, Tan said: "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company. These actions are critical to strengthening our competitive position going forward, but it means we are saying goodbye to valued colleagues. We plan to end the year with a global workforce of about 75,000 employees as a result of workforce reductions and attrition. We completed a significant amount of our workforce reductions in Q2, streamlining the number of management layers by about 50% in the process."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The company will no longer proceed with chip manufacturing plants in Magdeburg, Germany, and Wroclaw, Poland, each worth more than US$30 billion in planned investment. The job cuts represent almost a quarter of the company's 99,500-strong workforce and are significantly higher than previously announced plans to reduce workers by 15%. The cuts form part of the company's overall turnaround plan and come on the back of poor second-quarter financials, where it reported losses of US$2.9 billion on flat revenues of US$12.9 billion. In recent years, Intel has failed to capitalize on the rise of the artificial intelligence (AI) chip market, now dominated by graphics chipmaker Nvidia Corporation (Santa Clara, California), while its smaller, traditional chip rival AMD (Santa Clara, California) continues to make gains in the AI and data center markets.
"Over the past several years, the company invested too much, too soon -- without adequate demand," explained new Intel Chief Executive Officer Lip-Bu Tan. "In the process, our factory footprint became needlessly fragmented and underutilized. We must correct our course. With that in mind, we have decided not to move forward with previously planned projects in Germany and Poland. We also plan to consolidate our assembly and test operations in Costa Rica to our larger sites in Vietnam and Malaysia. Costa Rica remains a large and important Intel site that's home to key engineering teams and corporate functions.We remain deeply committed to investing in the U.S., where we will apply the same level of financial discipline. To that end, we are further slowing construction in Ohio to ensure our spending is aligned with demand -- while maintaining flexibility to accelerate based on new customer wins."
When first announced in 2023, Intel's Magdeburg investment plan of more than US$33billion was the largest-ever investment in Germany by an outside firm and was backed by US$11 billion in promised state subsidies. For additional information, see June 26, 2023, article - Intel Investing $33 Billion in German Chip Plants. The cancellation of the project has dealt a heavy blow to the European Union's (EU's) goal of increasing its share of global chip production to 20% (up from 10%) by 2030. In 2022, the EU introduced the European Chips Act, backed by 15 billion euro (US$17 billion) in additional public and private investment until 2030. This came on top of 30 billion euro (US$34 billion) of public investments that it had already planned. Within the act, the Chips for Europe Initiative set aside 11 billion euro (US$12.4 billion) to advance semiconductor projects. The planning process was also fast-tracked in Member States for new grassroot facilities and expansions of existing plants. For additional information, see February 21, 2022, article - Europe Enacts 'Chips Act' to Battle Semiconductor Shortages.
With regard to headcount, Tan said: "I know the past few months have not been easy. We are making hard but necessary decisions to streamline the organization, drive greater efficiency and increase accountability at every level of the company. These actions are critical to strengthening our competitive position going forward, but it means we are saying goodbye to valued colleagues. We plan to end the year with a global workforce of about 75,000 employees as a result of workforce reductions and attrition. We completed a significant amount of our workforce reductions in Q2, streamlining the number of management layers by about 50% in the process."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
