Chipmaker, Intel Corp. is set to cut more than 20% of its staff this week, representing over 21,000 employees this week, according to a report by Bloomberg citing a person with knowledge of the matter.
This comes less than a year after Intel laid off 15,000 staff in a previous cost-cutting effort.
As of the end of 2024, Intel had 108,900 employees, already down sharply from 124,800 a year earlier.
The layoffs would be the first major restructuring under new Chief Executive Officer Lip-Bu Tan, who took the helm last month.
New leadership strategy
Tan, a former Cadence Design Systems boss, has made it clear that Intel needs a fresh start.
After years of lagging behind rivals like Nvidia in the AI chip race, the once-dominant tech giant is looking to reclaim its edge.
Just last week, Intel sold a 51% stake in its programmable chip unit, Altera, to private equity firm Silver Lake.
- Tan has also flagged the need to rebuild lost engineering talent, revamp manufacturing processes, and put the company’s financials back on firmer footing.
- The company is scheduled to report first-quarter results on Thursday, giving Tan an opportunity to lay out more of his strategy.
- While some analysts believe the worst of the revenue decline is behind it, the road back to former glory remains long and uncertain. Wall Street isn’t projecting a full recovery any time soon.
More insights
The 65-year-old Tan took the helm following the exit of Pat Gelsinger, who had struggled to deliver on his ambitious turnaround plan.
- Gelsinger had hoped to transform Intel into a major player in contract chip manufacturing similar to TSMC, but progress was slow, and timelines have now been pushed back. A planned mega-facility in Ohio is currently on ice, and prospects of a deeper partnership with TSMC seem to be fading.
- Meanwhile, Intel’s early missteps in AI have proven costly. Once the king of PC and server chips, Intel watched from the sidelines as Nvidia captured the booming AI market, becoming the world’s most valuable semiconductor company in the process.
In his first public appearance as CEO, Tan acknowledged the challenges ahead and cautioned that the turnaround won’t be quick or easy. Still, the cuts and strategy shifts signal that he’s willing to make bold moves to steer Intel back into relevance.
What you should know
The planned layoffs by Intel will add to the growing list of tech companies that have disengaged workers this year as the players adjust to economic realities.
- Last week, Alphabet-owned Google laid off hundreds of employees in its Platforms and Devices division, a move that affects teams behind Android software, Pixel phones, and the Chrome browser.
- The latest layoffs by Google marked a continued effort to streamline operations in the face of broader restructuring at the tech giant.
- A Google spokesperson said the layoffs were part of efforts to become more nimble and operate more effectively after merging the Platforms and Devices teams, alongside a voluntary exit program offered in January.
