Intel Corporation is reportedly preparing to lay off more than 20% of its global workforce as part of a sweeping restructuring initiative led by newly appointed CEO Lip-Bu Tan. This move aims to streamline operations, reduce bureaucratic inefficiencies, and refocus the company on its core competencies in advanced chip design and manufacturing.
Lip-Bu Tan, who took over as CEO last month, is steering Intel towards an engineering-centric culture. The restructuring plan includes significant workforce reductions, targeting what Tan describes as a bloated and slow middle management layer. This initiative follows a previous 15% workforce reduction in August 2024, which was part of a $10 billion cost-saving effort.
Intel has been grappling with declining revenues and increased competition from rivals like AMD and Nvidia. The company’s struggles are attributed to its delayed response to market shifts, particularly in the booming AI sector. While Nvidia has surged ahead to become the world’s most valuable semiconductor company, Intel has lagged behind, missing out on lucrative opportunities in AI and advanced chip manufacturing.
Under Tan’s leadership, Intel is prioritizing its core business areas, including advanced chip design and manufacturing, while scaling back on less profitable ventures. The restructuring is seen as a critical step in positioning the company for long-term growth in a highly competitive market. During his first public appearance as CEO at the Intel Vision conference, Tan acknowledged the immense challenges facing the company but expressed confidence in a long-term recovery plan. “It won’t happen overnight,” he admitted, “but I know we can get there.”
Intel’s planned layoffs are part of a broader trend of workforce reductions across the tech industry. In 2024, numerous major U.S. companies, including Meta, ExxonMobil, Boeing, and IBM, announced significant layoffs across various industries such as technology, media, finance, manufacturing, and retail. A survey by ResumeBuilder indicated that nearly 40% of business leaders anticipated layoffs, with artificial intelligence being a key factor for the reduction in workforce.
As Intel embarks on this significant restructuring under Lip-Bu Tan’s leadership, the company aims to revitalize its operations and regain its competitive edge in the semiconductor industry. The success of these initiatives will be closely watched by investors and industry analysts alike.
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