Intel to cut more than 20,000 jobs and close factories in Germany and Poland

The American semiconductor company is seeking to turn its business around in an attempt to alleviate the crisis it is experiencing.

Intel has announced it intends to end the year with a workforce cut of more than a fifth. The company's new CEO, Lip Bu Tan, who replaced Pat Gelsinger last March, has presented a plan to investors to revitalize the company.

Although the executive didn't mention how many people will be laid off, he did say they will end the year with 75,000 employees. The chipmaker reported 108,900 employees at the end of last year and 96,400 at the end of June, so the cuts will affect more than 25,000 employees in less than a year.

The company's crisis-relief plan will also include halting construction of two factories in Europe , Germany and Poland, slowing the pace of factory construction in Ohio, and relocating operations in Costa Rica to Asia.

Specifically, Intel's plans in Europe were very ambitious. The company planned to build a mega-semiconductor factory in Magdeburg, Germany, and an assembly and testing complex in Wroclaw, Poland. In total, the investment target was €80 billion.

Intel has already cut nearly 15% of jobs since April, adding to the more than 15,000 jobs it cut last year.

The company is suffering the consequences of poor management. Intel has virtually no presence in the burgeoning AI chip industry, dominated by Nvidia, while rival AMD has been gaining ground in semiconductors for personal computers and servers, Intel's mainstays.

Tan's plans call for turning the company around after past mistakes. "There are no more blank checks," Tan wrote in a statement to his employees. "Every investment must be profitable. We will build what our customers need, when they need it, and earn their trust through consistent execution."

Intel quantified the cuts while releasing its second-quarter financial results, posting a net loss of $2.9 billion, which included restructuring charges from the latest adjustment plan. Revenue reached $12.9 billion, which was higher than analysts had predicted.

The company's shares fell as much as 6% after the cuts were announced.