In a bold and immediate move under new leadership, Intel is reportedly set to cut over 20% of its global workforce this week, according to Bloomberg News. The sweeping layoffs mark the first major decision by newly appointed CEO Lip-Bu Tan, who assumed the role last month with a mandate to revitalise the struggling chipmaker.
The job cuts form part of a broader strategy aimed at streamlining operations, reducing bureaucratic inefficiencies, and reigniting an engineering-led culture within the company. The restructuring efforts are expected to impact tens of thousands of employees, building on a previous reduction announced in August 2024, when Intel slashed 15% of its workforce—around 15,000 positions.
According to Reuters, Tan has identified bloated middle management as a key impediment to agility and innovation. Since stepping into the role, he has promised “tough decisions” to reverse Intel’s declining competitiveness in the semiconductor space, particularly as rivals like Nvidia surge ahead in artificial intelligence (AI) development.
During a recent town hall with employees, Tan emphasised the need for radical change, citing the slow pace of decision-making and internal silos as critical challenges. In line with these concerns, Intel has already begun flattening its organisational structure. Several core chip development teams now report directly to Tan, reducing layers of oversight and speeding up execution.
This restructuring comes amidst Intel’s ongoing $10 billion cost-cutting initiative for 2024, spurred by narrowing profit margins in its traditional PC and data centre businesses. The pivot towards AI—a space in which Intel has historically lagged—has introduced new financial strains, requiring large-scale investment in talent, infrastructure, and research. With competitors rapidly gaining market share in AI chips, Intel faces mounting pressure to realign its priorities and capital allocation.
Lip-Bu Tan’s appointment was met with cautious optimism in the industry, given his prior experience as a seasoned technology executive and investor. However, these workforce reductions are likely to trigger unease internally, especially in a climate of ongoing uncertainty in the global tech sector.
Intel, headquartered in Santa Clara, California, ended 2024 with approximately 108,900 employees, according to official filings. The latest cuts could affect over 21,000 employees across departments.
The company has yet to publicly comment on the layoffs. All eyes are now on Intel’s upcoming earnings report, scheduled for Thursday, where analysts expect further clarity on the financial implications of the restructure and the company’s long-term roadmap under Tan’s leadership.
As the global chip race accelerates, Intel’s strategy under Tan will be closely watched. His aggressive approach signals a determination to reposition Intel not just as a legacy player, but as a forward-facing innovator in AI and next-generation computing. Whether this dramatic overhaul will yield the desired results remains to be seen.
