Intel is preparing to announce plans to cut over 20% of its workforce this week in an attempt to reduce costs and cut down bureaucracy at the chipmaker, reports Bloomberg, citing a source with knowledge of the matter. The move to eliminate over 20,000 positions from Intel is part of the company's revival plan, designed by Chief Executive Lip-Bu Tan.
The restructuring aims to simplify operations and refocus the company on an engineering-driven culture after prolonged business challenges, according to the report. Lip-Bu Tan, who took leadership of the company last month, is pushing to purge excessive layers of management, eliminate redundant positions, and shift Intel back toward a product-focused approach while concentrating on key projects.
This round of layoffs follows a previous reduction of approximately 15,000 positions announced in August 2024. The reductions primarily affected non-engineering roles, including administrative staff, sales, marketing, and support functions. Manufacturing roles and key engineering teams were largely preserved during this round (according to media reports), as Intel pins a lot of hopes on its foundry ambitions and needs to develop competitive products.
For now, it is unclear which positions will be cut this time. Intel had 108,900 employees as of December 28, 2024 (which included several thousand Altera employees who are now employed by an independent company co-owned by Intel and Silver Lake), so the plan includes eliminating over 20,000 positions, a number that exceeds all mid-tier management positions at the company.
It is unclear whether this time the company will cut the number of engineers and projects that they are working on, though this looks like a likely scenario. Last year, it was reported that one of the reasons Lip-Bu Tan left the Intel board of directors was his disagreement with then-CEO Pat Gelsinger's plan to eliminate 15,000 positions, as Tan reportedly advocated for larger cuts. Apparently, he is taking his chance now. It is unclear whether the company is looking to encourage people to leave voluntarily using buyouts or early retirements, or lay off personnel.
Intel is set to announce its quarterly results this Thursday, and before that, the company is in its quiet period and will not comment on material changes to its business strategy.
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