Intel reveals new details about layoffs, government deal

NEW ALBANY, Ohio (WCMH) -- Intel has offered new details about the future of its business in a federal tax filing.

Intel released its third-quarter results on Oct. 28 but only filed a second, more detailed quarterly report last week. Intel said it has questions about its deal with the U.S. government but has been unable to connect with SEC staff for answers due to the government shutdown. See previous coverage of Intel's government deal in the video player above.

The report offered more insight into several big decisions Intel has made this year, including the federal deal. In August, Intel agreed to give President Donald Trump's administration a 10% stake in the company in exchange for promised federal funding. Intel was awarded a $8.9 billion federal deal in November 2024 but had received none of its promised CHIPS Act funding since Trump took office.

Ohio plant delays

Ohio was only mentioned once by name in Intel's filings, referring to long-term plans to expand existing operations and invest in Ohio's manufacturing plant. However, the filing reiterated that manufacturing expansion projects, like Intel Ohio One in New Albany, might have to be paused or discontinued if the company cannot find significant external customers and meet milestones for a technology called 14A.

Ohio's plant falls under the Intel Foundry division of the company. Foundry figures out the best methods or "recipes" for manufacturing semiconductors, which are small and difficult to make. These "recipes" are called process nodes, and 14A is Intel's newest node. The company has high hopes for 14A but said it will need to attract external customers to make its development worthwhile. 14A is still under development, but the Ohio plant's success largely hinges on 14A's marketability.

Ohio's plant also saw the departure of a number of leaders in a short period of time. Although Intel initially did not appear to be hiring to replace departed Ohio leaders, the company is now advertising new Ohio One positions, a good sign that Ohio's plant is still in motion. When announced in 2022, Ohio One was the largest private investment in the state's history.

Questions about government deal

Intel said it has questions about its deal with the government, as there is limited precedent to follow. Intel said in its filings that it has received $5.7 billion so far, but has lingering questions amid the government shutdown. Intel said the deal eliminated its contractual rights to receive future CHIPS Act funding as a grant, and could limit future grant opportunities.

Intel said it did not immediately release all shares to the government. Instead, it put some shares in escrow, meaning a third party holds funds until all agreed-upon conditions are met. Intel said it will release the remaining shares when the government releases funding.

According to the filing's risk factor segment, which details possible challenges in the future, Intel acknowledges the funding agreement could be threatened in several ways. Intel said future branches of government could find the agreement to be void. The company said foreign business, which accounted for 76% of Intel's revenue in 2024, could also be affected now that the U.S. government is a significant stakeholder.

Layoffs

Intel also offered insight into its layoffs, confirming that the company will reduce its workforce by about 15% by the end of the year. Most of the layoffs have already occurred, as the company laid off more than 13,000 employees over the past three months. The company plans to end 2025 with just 75,000 employees.

Intel recently sued a former employee, Jinfeng Luo, who was told on July 7 that he would no longer be employed, effective July 31. The federal lawsuit does not specify if Luo was let go due to company-wide reductions. It does allege Luo took nearly 18,000 company files with him when he left, many of which were top secret documents.

Musk deal

In a positive swing for Intel outside of its tax filing, Elon Musk announced that he is considering the company for a possible partnership. At Tesla's annual shareholders meeting on Thursday, Musk, who serves as the automaker's CEO, said he needed a "gigantic chip fab" to meet his AI and robotics needs.

"You know, maybe we'll do something with Intel," Musk said. "We haven't signed any deal, but it's probably worth having discussions with Intel."

Tesla currently works with two other semiconductor manufacturing companies, TSMC and Samsung. Musk said he thinks building a big chip fab is the only way to meet demands, and a stockholder mentioned Intel 14A as a possible collaborator. Musk seemed to be considering building a new fab from scratch, but with Intel Ohio One underway and in need of a customer, possible collaboration with Tesla is worth Ohio keeping an eye on.