Intel Confirms Restructuring Plans with Expected Layoffs

Beleaguered chipmaker Intel has announced plans to restructure, which will involve an unspecified number of layoffs. This news comes after reports surfaced earlier in the week that the company could potentially lay off around 20 percent of its staff, which totaled 108,900 employees at the end of last year. In a recent memo, Intel’s new CEO, Lip-Bu Tan, declined to provide specific details regarding the extent of the downsizing. The primary goal of this restructuring is to reduce "unnecessary bureaucracy" and streamline middle management layers.

Focus on Efficiency and Innovation

Tan expressed his belief in the philosophy that effective leaders achieve the most with the fewest people. He emphasized the importance of empowering top talent to make decisions and take greater ownership of key priorities. Tan acknowledged that these changes will inevitably lead to a reduction in the workforce. The restructuring process is set to begin in the second quarter and will be completed as quickly as possible over the next several months.

History of Downsizing

Intel has been undergoing significant downsizing over the past few years. In August of last year, the company announced plans to cut more than 15,000 jobs as part of a sweeping cost-cutting effort. The company has been facing challenges due to slowing sales, partly because it did not quickly adapt to the industry’s shift toward artificial intelligence.

Shift in Focus toward AI

Unsurprisingly, artificial intelligence will be a key focus area for Intel going forward. Tan emphasized the importance of building competitive products that meet customer needs in the new era of computing, defined by AI agents and reasoning models. To achieve this, Intel is taking a holistic approach to redefine its portfolio and optimize products for new and emerging AI workloads.

Engineering-Centric Approach

Tan aims to accelerate progress by transforming Intel into a company focused on engineering. He plans to make engineers more productive by eliminating burdensome workflows and processes that hinder innovation. The company intends to reduce costs in other areas to invest in engineering talent and technology roadmaps. Intel hopes to lower its operating expenses by $1.5 billion over the next two years.

Streamlining Operations

Efficiency is a top priority for Tan. He encourages managers to eliminate unnecessary meetings and reduce meeting attendees, as too much valuable time is being wasted. Intel is also expanding its return-to-office mandate, requiring workers to be on site four days a week, starting in September.

Ambitious Goals

Tan has set lofty goals for Intel’s turnaround. He envisions the opportunity to fundamentally reinvent an industry icon and create a comeback that will be studied in business schools for generations to come. Tan believes Intel can regain its position as the world’s most innovative company by driving necessary changes to improve.