Intel Slashes Spending as Altera Sale Finalizes - Strategic Shift Targets Efficiency

Intel just tightened its belt—hard. The Altera sale is done, and the chip giant's cutting costs like a blockchain project after the bull run ends.

Operational Overhaul

No more bleeding cash on non-core assets. Intel's dumping dead weight faster than traders dump altcoins at resistance levels. The move signals a ruthless focus on profitability—something Wall Street analysts probably called 'visionary' while updating their short positions.

Corporate Realignment

Every department's getting leaner. R&D, marketing, even the coffee budget—nothing's sacred. They're running tighter than a Bitcoin node's security protocol.

Market Positioning

Intel's playing 4D chess while competitors play checkers. By streamlining operations, they're freeing up capital for actual innovation—not just burning cash on vanity projects like some crypto foundations we know.

Bottom line: Intel's proving that sometimes the smartest move is to stop spending stupidly—a concept that would give most VC-funded crypto startups an existential crisis.

Image source: Getty Images.

The deal is done

In an SEC filing on Monday, Intel disclosed that the deal to dispose of a majority stake in Altera was complete. The transaction officially closed on Sept. 12, with Intel receiving $3.3 billion in exchange for a 51% stake in Altera. Intel retains a 49% interest in the company, making it a minority owner. Intel's third-quarter results will include revenue and expenses from Altera through Sept. 11. After that date, the accounting treatment will switch to the equity method.

Due to the accounting change, Intel has revised its outlook for full-year operating expenses. Intel now expects its non-GAAP (adjusted) operating expenses for 2025 to be around $16.8 billion, down from a previous $17 billion target. For 2026, Intel's operating expense target of $16 billion remains unchanged.

Selling a majority stake in Altera accomplishes two things for Intel. First, it raises billions in cash at a time when Intel needs capital to fund its foundry ambitions. Second, it gives control of a non-core business to someone else, freeing up focus and resources. Altera is capable of thriving under the right leadership and ownership structure, and Intel will still benefit as a minority shareholder if the company can turn things around.

A string of cost cuts

The Altera sale come amid a broad cost-cutting initiative from CEO Lip-Bu Tan, who took over earlier this year. Significant layoffs started over the summer, with Tan noting that teams had become too large, and that the culture around managers growing the size of their teams needed to change.

Intel has also taken other steps to rein in costs. The company shut down its automotive business in June, eliminating another non-core business and laying off most of the employees involved. The company also disclosed that it WOULD outsource its marketing operations to, which will use artificial intelligence to boost efficiency. Intel has already been reducing advertising costs, lowering spending from $1.2 billion in 2022 to $856 million in 2024.

Together, these moves will help Intel reach its operating expense target for 2026.

Cost-cutting isn't enough on its own

While Intel certainly needs to reduce its costs to reflect its market share losses, the company also needs to return to revenue growth. That means regaining share in the PC and server CPU businesses, as well as winning substantial customers for the foundry business.

The Intel 18A process, which will be used by Intel's upcoming Panther Lake and Nova Lake chips on the PC side, and by Diamond Rapids and Clearwater Forest on the server side, will be critical to the company's comeback. Intel 14A, the next-generation process node, will need to win over some external customers for the foundry business to work in the long run.

One risk that always comes along with cost-cutting is the potential for Intel to cut itself off at the knees. Intel needs to lay off a substantial number of employees while retaining and attracting the talent necessary to stage a comeback in its PC and server CPU businesses. And it needs to make the foundry operation leaner and more efficient even as it scrambles to win over customers. Balancing both sides of the equation will be tricky.

The sale of a majority stake in Altera, though, is a positive development. Altera never reached its full potential as part of Intel, and it's no longer a distraction as the company plots a comeback.