U.S. chipmaker Intel is laying off thousands of employees and scaling back projects as part of an aggressive restructuring drive under its new CEO, aimed at regaining lost ground in a competitive semiconductor market.

In a memo to employees on Thursday, CEO Lip-Bu Tan said Intel plans to end the year with 75,000 “core” employees—down from 99,500 at the end of last year—through a combination of layoffs and attrition. The company had previously announced a 15% workforce cut.

“These are difficult but essential steps to streamline operations, enhance efficiency, and reinforce accountability across the company,” Tan said.

The chipmaker is also cancelling planned expansions in Germany and Poland and will relocate its assembly and testing operations from Costa Rica to larger facilities in Vietnam and Malaysia. Costa Rica will continue to host key engineering and corporate teams, according to the memo.

In the U.S., Intel said it will further delay construction of its new semiconductor plant in Ohio.

Founded in 1968 and once a pioneer of the personal computing era, Intel has struggled to keep pace with rivals like Nvidia and AMD, especially amid the recent AI boom. Nvidia, once a smaller competitor, now dominates the market for AI chips and boasts a market valuation of $4.24 trillion—dwarfing Intel’s $98.71 billion market cap as of Thursday's market close.

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Tan emphasized that Intel is prioritizing its core products and AI development. “There are no more blank checks. Every investment must make economic sense,” he wrote.

For the second quarter, Intel posted a net loss of $2.9 billion, or 67 cents per share—widening from a $1.6 billion loss a year earlier. Excluding special items, the adjusted loss was 10 cents per share.

Revenue held steady at $12.9 billion, slightly above analysts' expectations of $12 billion, according to FactSet.

Source: Agency