Amorphous alloys (AAs) have the advantage of low core loss. Thus, they can be used in high-speed motor applications. However, compared with the nominal performances, the performance of the wire-cut electric discharge machine (W-EDM)-processed AA iron core changes significantly, which limits its popularization. This paper focuses on the performance degradation mechanism of the AA ribbon caused by W-EDM and establishes a modified core loss model after machining. First, a 308 × 15 mm ribbon-shaped AA sample machined by W-EDM was prepared. The characterization and analysis of the magnetic properties, phase, magnetic domain, nano-indentation, micro-morphology, and composition were carried out. In this paper, by analysing the variation in the magnetic domain distribution based on domain width and nano-mechanical properties, it is proposed that the performance degradation range of AA ribbons processed by W-EDM is within 1 mm from the edge. By comparing the microscopic morphology and chemical composition changes in the affected and the unaffected area, this paper presents a mechanism for the property deterioration of W-EDM-processed AA ribbons based on electrochemical corrosion. Finally, a modified loss model for W-EDM-processed AAs is established based on the division of the affected area. This model can significantly improve the accuracy of core loss estimation in the medium- and high-frequency bands commonly used in high-speed motors.