Intel Plans Major Workforce Reduction

Intel is reportedly preparing to announce plans this week to cut over 20% of its staff, as part of an effort to streamline operations and improve efficiency, as reported by Bloomberg News citing an insider.

These reductions are part of a larger initiative to place greater emphasis on a culture driven by engineering excellence.

Intel has not yet provided a response to a request for comments. Shares saw an increase of over 4.5% in premarket trading.

These layoffs represent a significant action under the leadership of CEO Lip-Bu Tan, who assumed the role last month, aiming to rejuvenate the company following prolonged difficulties and strategic errors.

Last month, it was revealed that Tan was formulating a plan to restructure Intel’s manufacturing processes and AI operations. This followed the company’s loss of its leading position in chip manufacturing to TSMC and its failure to capitalize on the growing demand for AI processors, which allowed competitors like Nvidia to dominate.

Intel is also divesting a majority stake in Altera for $4.46 billion to support its recovery efforts.

Last week, reports emerged that Tan was simplifying Intel’s leadership structure and had appointed a new AI leader to guide the company’s ambitions in artificial intelligence.

However, Intel’s AI strategies face uncertainty after downgrading its Falcon Shores chips to internal testing, which leaves the company without a leading product in the AI market.

The semiconductor manufacturer is scheduled to release its first-quarter results on Thursday, which will provide a clearer insight into Tan’s recovery plan. This plan could encounter obstacles due to the escalating trade tensions between the U.S. and China, along with potential retaliatory tariffs.

The planned workforce reduction follows a previous significant cut in August, when Intel announced a 15% reduction in its workforce as part of the turnaround strategy initiated by former CEO Pat Gelsinger, who aimed to regain Intel’s dominance in chip manufacturing.

Gelsinger’s ambitious plans for Intel did not instill confidence in the company’s board, who believed that the turnaround strategy was ineffective and that the pace of change was too slow, leading to his dismissal at the end of the previous year.

The Santa Clara, California-based firm reported having 108,900 employees at the close of 2024, according to company records.