Intel’s CEO just revealed why more layoffs are coming. His memo shows the grim impact of course correction

Intel Corp. reported $12.9 billion in revenue for its second quarter, matching year-over-year results and beating Wall Street forecasts. However, the company's stock price fell about 8% in after-hours and premarket trading due to news of higher losses, additional layoffs, and the scaling back of its foundry business. Intel reported a $2.9 billion loss, compared to $1.6 billion in the same quarter last year. The company plans to lay off around 15% of its workforce, leaving it with about 75,000 employees worldwide by the end of 2025. This follows previous layoffs of 15% and 20% of its headcount last year and in April, respectively. Intel's foundry business is being restructured after investing too much in it without adequate demand, leading to a fragmented and underutilized factory footprint. The company will take a more systematic and disciplined approach to growing its factory footprint, aligning it with customer needs. As part of this restructuring, Intel is pulling back on or abandoning several projects, including initiatives in Germany and Poland, and slowing construction of planned factories in Ohio. The company is also integrating its Costa Rica assembly and test operations into its Vietnam and Malaysia sites. Intel's CEO, Lip-Bu Tan, stated that the company must correct its course and be more judicious and disciplined in allocating capital.