US chip maker Intel announced Thursday it will reduce its workforce by more than 15 percent as part of a plan to streamline operations. This move is part of Intel's strategy to cut approximately $20 billion in expenses this year, following a reported loss of $1.6 billion in the recent quarter.

"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," said Intel CEO Pat Gelsinger in an earnings release. "Second-half trends are more challenging than we previously expected."

Chief Financial Officer David Zinsner attributed the second-quarter earnings decline to issues with the ramp-up of Intel's AI PC product and unused capacity at its facilities. "By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Zinsner added.

With Intel's workforce at 124,800 employees at the end of last year, the layoffs could impact around 18,000 positions. In June, Intel paused the expansion of a significant factory project in Israel, which was set to invest an additional $15 billion into a chip plant. Intel stated that managing large-scale projects requires adapting to changing business conditions, market dynamics, and responsible capital management.

The cost-cutting measures come shortly after Intel's ambitious unveiling of new technologies designed to lead the AI revolution, despite strong competition from rivals Nvidia, AMD, and Qualcomm. At the Taiwan Computex expo, Gelsinger introduced Intel's latest Xeon 6 processors for servers and provided details on the next-gen Lunar Lake chips for AI PCs.

"AI is driving one of the most consequential eras of innovation the industry has ever seen," Gelsinger said. "The magic of silicon is once again enabling exponential advancements in computing that will push the boundaries of human potential and power the global economy for years to come."

Microsoft's recent unveiling of its Copilot+ AI PCs, which will feature built-in AI capabilities, signals a significant shift in the PC market. Intel anticipates that AI computers will account for 80 percent of the PC market by 2028, according to the Boston Consulting Group.

US chip maker Intel announced Thursday it will reduce its workforce by more than 15 percent as part of a plan to streamline operations. This move is part of Intel's strategy to cut approximately $20 billion in expenses this year, following a reported loss of $1.6 billion in the recent quarter.

"Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones," said Intel CEO Pat Gelsinger in an earnings release. "Second-half trends are more challenging than we previously expected."

Chief Financial Officer David Zinsner attributed the second-quarter earnings decline to issues with the ramp-up of Intel's AI PC product and unused capacity at its facilities. "By implementing our spending reductions, we are taking proactive steps to improve our profits and strengthen our balance sheet," Zinsner added.

With Intel's workforce at 124,800 employees at the end of last year, the layoffs could impact around 18,000 positions. In June, Intel paused the expansion of a significant factory project in Israel, which was set to invest an additional $15 billion into a chip plant. Intel stated that managing large-scale projects requires adapting to changing business conditions, market dynamics, and responsible capital management.

The cost-cutting measures come shortly after Intel's ambitious unveiling of new technologies designed to lead the AI revolution, despite strong competition from rivals Nvidia, AMD, and Qualcomm. At the Taiwan Computex expo, Gelsinger introduced Intel's latest Xeon 6 processors for servers and provided details on the next-gen Lunar Lake chips for AI PCs.

"AI is driving one of the most consequential eras of innovation the industry has ever seen," Gelsinger said. "The magic of silicon is once again enabling exponential advancements in computing that will push the boundaries of human potential and power the global economy for years to come."

Microsoft's recent unveiling of its Copilot+ AI PCs, which will feature built-in AI capabilities, signals a significant shift in the PC market. Intel anticipates that AI computers will account for 80 percent of the PC market by 2028, according to the Boston Consulting Group.