Intel is making deep cuts to its manufacturing and staffing plans in an effort to correct years of overinvestment. In its Q2 earnings report, the company announced it’s scrapping projects in Germany and Poland and consolidating testing sites worldwide.

The moves follow CEO Lip-Bu Tan’s acknowledgment that Intel’s factory expansion exceeded market needs. Testing operations in Costa Rica will be redirected to more efficient locations in Asia.

Tan said the company will now make capital expenditures only when linked to customer commitments and concrete benchmarks. “Our factory footprint has become needlessly fragmented,” he added.

Intel’s restructuring includes significant layoffs. From nearly 109,000 employees in 2024, the company expects to reach 75,000 by the end of this year, reflecting a 15% reduction. The Foundry unit has absorbed a substantial portion of the cuts.