What to know

  • Intel is reportedly planning to lay off over 21,000 employees, about 20% of its workforce.
  • The layoffs are part of a broader restructuring led by new CEO Lip-Bu Tan, who took over last month.
  • The company aims to streamline operations, reduce management layers, and refocus on engineering and AI development.
  • Intel has not officially confirmed the layoffs, but an announcement is expected soon.

Intel, one of the world's largest semiconductor companies, is reportedly preparing to lay off more than 21,000 employees as part of a sweeping restructuring effort. This move comes under the leadership of Lip-Bu Tan, who became CEO last month with a mandate to revitalize the company's performance and competitiveness in the global chip industry.

The planned layoffs represent about 20% of Intel's global workforce, based on its most recent headcount of nearly 109,000 employees. The cuts are expected to affect staff across various departments and regions, with a particular focus on middle management.

The company has identified slow decision-making and bureaucratic inefficiencies as major obstacles to innovation and agility, especially as competitors like Nvidia advance rapidly in artificial intelligence chip development.

This restructuring is part of Intel's broader $10 billion cost-reduction plan for 2024. It follows a previous round of layoffs in August 2024, when the company reduced its workforce by 15%, or about 15,000 positions.

The new CEO has emphasized the need for "tough decisions" to rebuild an engineering-driven culture and accelerate the company's shift toward advanced chip manufacturing and AI technologies.

In recent internal meetings, Tan has highlighted the importance of flattening the organizational structure. Several core chip development teams now report directly to him, reducing layers of oversight and aiming to speed up execution.

These changes are intended to address Intel's declining margins in its core PC and data center businesses and to manage the rising costs associated with developing next-generation AI chips.

Intel has not yet made a public statement confirming the layoffs. The company is expected to provide more details during its upcoming first-quarter earnings announcement. The restructuring signals a significant shift in strategy as Intel seeks to regain its position in a rapidly evolving and highly competitive industry.

Via: TechCrunch