Intel is set to announce plans this week to cut more than 20 per cent of its workforce as part of a strategy to streamline management and rebuild an engineering-driven culture at the struggling chipmaker, according to reporting from Bloomberg.
The layoffs would mark the first major restructuring under new chief executive officer Lip-Bu Tan, who took the helm last month, and follow a previous round of cuts announced in August last year which aimed to eliminate about 15,000 jobs.
Intel had 108,900 employees at the end of 2024, down from 124,800 the previous year, according to company filings.
Tan, a 65-year-old veteran of Cadence Design Systems Inc, has vowed to spin off Intel assets that aren’t central to its mission and create more compelling products. Last week, the company agreed to sell a 51 per cent stake in its programmable chips unit Altera to Silver Lake Management, a step toward that goal.
“It won’t happen overnight,” Tan said at the Intel Vision conference last month, acknowledging that turning around the company would take time and wouldn’t be easy. “But I know we can get there.”
The chief executive has been clear about the need for change, telling employees in a town hall shortly after his appointment that the company will have to make “tough decisions” and addressing what he described as a slow-moving and bloated middle management layer.
Intel has struggled in recent years, losing technological ground to rivals and missing out on the artificial intelligence computing boom that has propelled Nvidia Corp to become the world’s most valuable semiconductor company with revenue that now eclipses Intel’s sales.
The iconic chipmaker has posted three straight years of sales declines and mounting losses. Tan’s predecessor, Pat Gelsinger, was ousted last year after struggling to execute his own turnaround bid, which included a costly effort to expand the company’s factory network.
Intel has since delayed much of its expansion effort, including plans for an Ohio facility that was once expected to become the world’s largest chip production hub.
The company is scheduled to report first-quarter results on Thursday, giving Tan an opportunity to lay out more of his strategy for rebuilding the once-dominant chipmaker.
