Intel recently announced its first-quarter financial results for 2025, with revenue reaching $12.7 billion, flat year-over-year and exceeding market expectations. However, net losses amounted to $821 million, widening from the $381 million loss in the same period last year. Since taking office as the new Chief Executive Officer in March 2025, Lip-Bu Tan has been accelerating the company’s transformation, attempting to lead Intel back to its peak by streamlining the organizational structure, improving execution efficiency, and reshaping the engineering culture.
In terms of product category performance, Intel’s Client Computing Group (CCG) saw its revenue decline by 8% year-over-year to $7.6 billion, impacted by multiple factors. Fluctuations in global personal computer market demand were a primary reason. Although PC shipments showed some recovery in the first quarter, partly due to original equipment manufacturers stockpiling in advance to counter potential tariff increases, the division has not yet returned to growth. Furthermore, shortcomings in the performance and quality of Intel’s own products, coupled with competitive pressure from AMD’s high-performance Ryzen series processors in the market, further eroded CCG’s market share. In contrast, the Data Center and AI (DCAI) division performed strongly, with revenue growing by 8% year-over-year to $4.1 billion, indicating a gradual strengthening of the company’s competitiveness in high-performance computing and AI. Intel Foundry also achieved 7% growth, with revenue of $4.7 billion. Other business units saw a surge of 47% in revenue, contributing $900 million, demonstrating the initial success of the diversification strategy.
Since taking over as CEO in March 2025, Lip-Bu Tan has rapidly initiated a series of reform measures. In a conference call with investors, he emphasized that Intel needs to return to its engineering-centric roots, eliminate bureaucracy, and improve decision-making efficiency. To this end, he has streamlined the leadership team, compressing management layers in key product, manufacturing, and administrative functions, with all core departments now reporting directly to him. This flatter organizational structure is conducive to accelerating product development cycles and enhancing communication efficiency with customers, thereby closing the gap with competitors faster. Tan stated frankly, “We have no shortcuts; we must win back the market through better execution and innovative products.”
Layoffs have become a crucial part of Tan’s reforms. To cope with ongoing financial pressures and market competition, Intel plans to further reduce its workforce, continuing the trend from the 15,000 job cuts in 2024. According to industry sources, in April 2025, Intel announced potential layoffs of up to 20%, affecting approximately 21,000 employees, with the aim of cutting the bloated middle management and reshaping an efficient, engineering-driven culture. In a public letter to employees, Tan said, “We are in a lagging position and must unite, optimizing our organization to put ourselves in a more competitive stance.” Additionally, he has pushed to reduce unnecessary meetings, simplify decision-making processes, and mandated a return to the office for employees to improve team collaboration efficiency.
In terms of technological innovation, Intel is increasing its investment in advanced process technology. Its 18A process technology is expected to enter mass production in the second half of 2025 and will be used in the next-generation Panther Lake processors. This technology is seen as a significant milestone for Intel’s foundry business, with the potential to attract more external customer orders. At the recent Intel Vision 2025 conference, Tan stated that the company will continue to focus on a dual-engine strategy of chip products and foundry services, while divesting non-core businesses to concentrate resources on areas such as artificial intelligence, software 2.0, and high-performance computing. He also emphasized that Intel will strengthen its market position through customized collaborations with major customers like Microsoft and Apple, while leveraging nearly $8 billion in subsidies from the U.S. CHIPS and Science Act to accelerate its domestic manufacturing footprint.
Looking ahead to the second quarter of 2025, Intel’s Chief Financial Officer David Zinsner expects revenue to reach $11.8 billion, a figure below market expectations, which led to stock price volatility after the earnings release. Analysts point out that Intel’s layout in the AI chip market and the progress of its foundry business will be key areas of focus in the future. In 2024, Intel’s share in the AI data center market increased, with its Xeon processors gaining customer recognition for performance and energy efficiency, but further breakthroughs in cost control and product competitiveness are still needed.
Lip-Bu Tan’s arrival has injected new vitality into Intel. This veteran of the semiconductor industry is renowned for his successful turnaround experience at Cadence Design Systems, where he doubled revenue and saw the stock price grow by over 3200% during his tenure as CEO from 2009 to 2021. He emphasizes that Intel needs to reshape its market competitiveness by listening to customer needs, accelerating technology iteration, and optimizing resource allocation. Of course, the challenges he faces are significant: AMD’s share in the PC processor market has climbed to 40.6%, while Intel’s has fallen to 59.4%; the foundry business has incurred losses for three consecutive years, with losses reaching $13.4 billion in 2024; furthermore, the company must cope with global supply chain fluctuations and geopolitical uncertainties.
Intel is at a critical juncture in its transformation. Whether Lip-Bu Tan’s reform measures can reverse the decline and restore its former glory remains to be seen. He has stated publicly on multiple occasions that building a long-term successful business model is more important than short-term gains, a philosophy that will guide Intel’s strategic direction in the coming years. With the mass production of the 18A process approaching and the rapid growth of the AI market, Intel has the potential to find new growth points in the data center and foundry sectors. However, the key to success lies in whether it can quickly deliver on its technological promises in the face of intense market competition and win customer trust.