Menu Home News Hardware Gaming Mobile Finance Deals Reviews How To Wccftech FinanceSemiconductor Intel Q1 2025 Earnings: Lip Bu-Tan Eschews Layoffs For Now, Guidance Is Wholly Disappointing [Update: Layoffs Imminent] Rohail Saleem • Apr 24, 2025 at 04:25pm EDT This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Intel likely benefited from the pull-forward of demand during the first quarter of 2025, as retailers and consumers alike tried to front-run the Trump administration's then-widely expected import tariffs. It is for this reason that Wall Street analysts have been somewhat upbeat on Intel's immediate prospects, even though the overarching narrative around the erstwhile semiconductor giant's shrinking market share remains as robust as ever. Coming to the topic at hand, Intel has now announced its earnings for the first quarter of 2025, posting broadly encouraging results relative to Wall Street's consensus expectations, but tempered by woefully inadequate guidance. Intel (NASDAQ: INTC) Earnings Release For The First Quarter of 2025 For the three months that ended on the 31st of March, Intel has reported $12.667 billion in non-GAAP revenue, beating consensus expectations of $12.32 billion. Quarterly Revenue In Millions Of Dollars Revenue 0369121518 0369121518 Q1 2024 12 Q4 2024 14 Q1 2025 Guidance 12 Q1 2025 Consensus 12 Q1 2025 Actual 12 Here is the actual performance of Intel's business segments in Q1 2025: Revenue From Intel's Business Segments The following chart compares the performance of Intel's two major segments - Data Center and AI (DCAI) and Client Computing Group (CCG) - with Wall Street's consensus expectations (source). Segmental Revenue In Millions Of Dollars CCGDCAI 020004000600080001000012000 020004000600080001000012000 Q1 2024 7.5k3k Q1 2025 Consensus 6.9k2.9k Q1 2025 Actual 7.6k4.1k As mentioned earlier, Intel likely benefited from the tariff-driven pull-forward of demand in the just-concluded quarter, with Bernstein's Stacy A. Rasgon going so far as to term this thesis "eminently possible" in a research note published today. However, Rasgon cautioned against a corresponding "channel flush" in the second half of the year as retailers try to digest their elevated inventories. The Bernstein analyst also highlighted the poor reception to Intel's Gaudi platform and the cancellation of Falcon Shores to note that the company "still has no real response to the AI/GPU threat." Coming back, Intel has reported a non-GAAP gross margin of 39.2 percent for the quarter against its own guidance of 36 percent. Finally, Intel earned $0.13 in EPS (non-GAAP), beating consensus expectations of $0.01. Here is the company's guidance for the second quarter of 2025: Intel Guidance Intel is projecting just $11.8 billion in revenue in the second quarter of 2025 (at the midpoint of its guided range). Analysts expected the company to guide to $12.8 billion in revenue. Similarly, the company's projection for its non-GAAP EPS in the ongoing quarter is equally disappointing, with analysts' consensus expectations pegged at $0.06. We reported earlier this week that Intel was considering another round of mass layoffs, to the tune of 20 percent of its workforce, which corresponds to over 21,000 employees. That cut has not materialized. Bear in mind that Intel culled 15,000 jobs in 2023, and a further 15,000 in 2024. Despite pronounced expectations, Intel has eschewed further layoffs for now, choosing to detail its operational efficiency plans in the following words: Intel is reducing its non-GAAP operating expense target to approximately $17 billion in 2025, down from its previously stated goal of $17.5 billion, and is now targeting $16 billion in 2026. Operating expenses include research and development (R&D), and marketing, general and administrative (MG&A). Intel expects to have restructuring charges associated with these actions, some of which may be included in its non-GAAP results. Since the company has not yet estimated these charges, they are not included in its guidance. Additionally, further operational efficiencies and better utilization of construction-in-progress assets allow Intel to reduce its gross capital expenditures target to $18 billion for 2025, down from the company's previous target of $20 billion, while still expecting net capital expenditures of approximately $8 billion to $11 billion. Intel will continue to focus investment in its core business as it drives operational efficiency. Investors have reacted negatively to the company's latest earnings release, with the stock currently down around 7 percent in after-hours trading. The company's guidance is nothing short of disastrous. Also, the lack of a cogent strategy on streamlining Intel's bloated middle management structure is also taking a toll at the moment. Update: Lip Bu-Tan Says Layoffs Begin In Q2 Intel's CEO has issued the following message to the company's employees: "As we refocus on engineering, we will also remove organizational complexity. Many teams are eight or more layers deep, which creates unnecessary bureaucracy that slows us down." "I’ve been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams. Going forward, this will not be the case." "There is no way around the fact that these critical changes will reduce the size of our workforce. As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2 and we will move as quickly as possible over the next several months." "I am instructing our leaders to eliminate unnecessary meetings and significantly reduce the number of meeting attendees. Too much valuable time is being wasted." "We will be updating our policy to require four days per week on site by Sept. 1." 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