Intel Corp. is set to announce a 20% reduction in their 108,900-strong workforce this week, according to a Bloomberg report quoted in Reuters on Tuesday, that cited an official in the know. Estimated to impact over 21,000 roles, Intel's biggest round of layoffs thus far aims to reduce layers of bureaucracy, cut costs, and focus more on engineering roles.
The layoffs will also be the first major restructuring move under Intel's new CEO, Lip-Bu Tan, who took up the position on March 18 with a view to return the embattled chip software company to its engineering roots, amid financial constraints and heavy competition from Nvidia and AMD.
“Intel plays an essential role in the technology ecosystem, both in the US and around the world. And, together, I’m confident we can turn our business around,” he explained, in a memo sent to Intel employees on March 12 this year.
Calling the company the “New Intel”, he declared his intentions to make it an “engineering-focused company” capable of restoring its position as a world-class chipmaker.
This round of staff cuts comes after a round of layoffs in August 2024, that saw roughly 15,000 employees lose their jobs, in response to a net loss of $1.6 billion in the second quarter of 2024. Intel's intent then—and now—is to reduce costs by $10 billion by 2025 by streamlining its workforce, restructuring, and cost-cutting.
Just last month, Tan had announced plans to restructure the company's manufacturing and AI operations, after the legacy chipmaker lost its lead in chip manufacturing to the Taiwan Semiconductor Manufacturing Company Limited (TSMC), and lagged behind Nvidia in AI processor innovation.
According to Intel's annual report for 2024, the total number of employees declined from 124,800 in 2023 to 108,900 in 2024: the end product of a decline in annual revenue from $79 billion in 2021 to $53.1 billion in 2024, marking an average annual decline of 2%.
Intel anticipates its first-quarter results report on Thursday, a test of whether Tan's strategy can overcome Intel's steady decline, resist the impact of the Trump tariffs (with the possibility of the trade war with China escalating) and, in his own words, “remake Intel for the future”, despite being an extrapolation of ex-CEO Pat Gelsinger's turnaround strategy, that failed to impress investors, leading to the latter's eventual exit from Intel at the end of 2024.
“It won’t happen overnight,” Tan said, at his first Intel Vision conference as the CEO, “but I know we can get there”.
