Months after receiving $8.5 billion in federal grants to boost U.S. chipmaking, Intel announced it will cut 15% of its workforce, about 17,000 jobs, as part of a major restructuring plan.

CEO Pat Gelsinger cited the need to align costs with a new operating model and address lower-than-expected revenues and high costs.

Intel’s stock fell 26% after the announcement.

The decision to cut jobs despite federal funds raised concerns.

Intel’s subsidies came from the Biden administration’s CHIPS and Science Act, which aims to enhance U.S. semiconductor manufacturing and competitiveness.

The act allocated over $52 billion for semiconductor research, development, and workforce initiatives, Fox Business has reported.

Demand for AI chips has negatively impacted Intel’s sales, leading to a loss of $1.6 billion in the latest quarter.

Written by B.C. Begley