Intel’s Struggles Continue Under New Leadership as Cost Cuts Fail to Offset Margin Pressures

Intel's transition to new CEO Lip-Bu Tan has done little to stem the company's financial woes. The chipmaker's stock plummeted 8.5% following another disappointing quarterly report, with flat revenue of $12.9 billion masking significant weaknesses in Core segments.

The PC-focused Client Computing Group saw revenue decline 3% to $7.9 billion, while Data Center and AI managed only 4% growth to $3.9 billion. Foundry services, representing Intel's other CORE business, posted a modest 3% increase to $4.4 billion.

Aggressive cost-cutting measures, including the elimination of 15% of its workforce, proved insufficient to counter margin erosion. Gross margins collapsed from 38.7% to 29.7%, driven by $800 million in non-cash impairments and $200 million in one-time costs. Without these extraordinary items, margins WOULD still have contracted by 100 basis points.