Intel Job Cuts Hit Tech Division, Over 20% Staff Reduction Planned

Intel plans to cut over 22,000 jobs, which makes up about 20% of its total workforce. The tech giant that once shaped computing’s future now faces this massive downsizing after struggling with falling sales and mounting losses for three straight years.

The company already reduced its workforce by 15% last August, and we have watched these developments closely. The latest round of cuts comes as new CEO Lip-Bu Tan’s first major move to reshape Intel. Tan wants to build an “engineering-first” culture by cutting through bureaucracy and making management more efficient. His strategy focuses on improving the company’s finances while bringing in fresh engineering talent. The news seemed to please investors as Intel’s stock jumped 4.5% in premarket trading, showing support for these tough but essential changes.

Intel Announces 20% Workforce Reduction

Bloomberg reported Tuesday that Intel plans to cut more than 20% of its workforce, which will affect around 21,000 employees. The chipmaker will announce these deep cuts this week. This marks the biggest reduction in the company’s recent history. The massive downsizing comes after Intel’s sales declined for three straight years, showing just how deep the problems run at the once-dominant chip manufacturer.

Layoffs confirmed ahead of Q1 earnings

The announcement’s timing matters a lot since Intel will report its first-quarter earnings on April 24. Several reports suggest that these job cuts line up with CEO Lip-Bu Tan’s first earnings call since he started leading the company. This lets the new executive team show investors both their restructuring plan and financial results at once.

Intel had about 108,900 employees when 2024 ended, down from 124,800 the year before. The upcoming cuts will affect much of its remaining workforce. The company already cut about 15,000 jobs (15% of its workforce) in August 2024. Both waves of job cuts in 2024 will reshape how the organization works and what it can do.

The market reacted well at first, as investors seemed to back this bold approach to fixing Intel’s ongoing problems. The company has faced big challenges over the last several years:

• Lost its tech edge to competitors like TSMC and Nvidia
• Missed chances in the faster-growing AI processor market
• Falling revenue across many business areas
• Poor management decisions that upset board members and investors

CEO Lip-Bu Tan leads first major restructuring

Lip-Bu Tan moved fast to put his plan for Intel’s comeback in place after becoming CEO in March 2025. These job cuts are his first big restructuring move since taking over from Pat Gelsinger, whose turnaround plan didn’t work out with the board.

Tan, who used to run Cadence Design Systems, spotted several big problems at Intel that he wants to fix through this restructuring:

• “Organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation.”
• Decisions take too long to make
• New ideas don’t get enough resources
• Separate departments don’t work well together

Tan told employees in a memo that “Intel will be an engineering-focused company” under his watch. This matches his background and the concerns he had while serving on Intel’s board. Reuters reported that Tan left Intel’s board last year partly because he wanted bigger cuts than then-CEO Gelsinger.

The restructuring aims to cut red tape and reduce management layers. Tan has already started reorganizing leadership, and key semiconductor groups now report directly to him. He puts technical experts in leadership roles and removes extra management positions that slow things down.

“Together, we will work hard to restore Intel’s position as a world-class products company, establish ourselves as a world-class foundry, and delight our customers like never before,” Tan wrote to employees. Beyond the restructuring and job cuts, Intel recently sold 51% of its programmable chips unit, Altera, to Silver Lake Management. This shows Tan’s commitment to streamline operations and focus on core technologies.

CEO Lip-Bu Tan Initiates Turnaround Strategy

Lip-Bu Tan brings a proven track record of successful leadership as Intel’s new CEO. This industry veteran steps into a challenging position amid the Intel job cuts with a clear vision to revitalize the struggling chipmaker.

Tan’s background at Cadence Design Systems

Tan’s 12-year tenure as CEO of Cadence Design Systems from 2009 to 2021 proved him to be a transformative leader. His guidance helped Cadence double its revenue, expand operating margins, and deliver an extraordinary 3,200% stock price appreciation. This soaring win restored Cadence’s position as a leader in chip design software after Tan took over when Michael Fister resigned in 2008.

Tan led Cadence to deliver software for sophisticated chip designs while building strategic collaborations with Taiwan Semiconductor Manufacturing Co. (TSMC). His leadership helped secure Apple as one of Cadence’s largest customers when the iPhone maker changed away from suppliers like Intel toward designing its own chips. Cadence’s tools became crucial for companies like Broadcom that supported Google, Amazon, and others in designing their AI chips.

“He did a really good job of pointing Cadence in the right direction,” noted Karl Freund, analyst with Cambrian AI Research. “Cadence really arranged themselves with TSMC – they saw them as a leader and the go-to shop.”

Tan’s extensive experience in both chip design and manufacturing gives him unique insight into Intel’s integrated business model. His venture capital background with investments in many AI startups could position Intel to challenge industry leader Nvidia in the AI processor market.

Vision to restore engineering-first culture

Tan stated a clear vision for Intel’s future that tackles the company’s recent challenges head-on. “Under my leadership, Intel will be an engineering-focused company,” Tan declared in his message to employees. This emphasis shows a fundamental change for the company that doesn’t deal very well with state-of-the-art and customer responsiveness.

His turnaround strategy focuses on three core principles:

1. Customer-centricity: “As CEO, my No. 1 priority has been spending time with customers,” Tan stated during Intel’s Vision 2025 event.
2. Engineering excellence: Tan restructures Intel to strengthen technical talent, with key chip groups now reporting directly to him.
3. Streamlined decision-making: “It’s clear to me that organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win,” Tan noted in an internal memo.

The ongoing Intel job cuts of 2024 haven’t stopped Tan from investing in top engineering talent while cutting unnecessary bureaucracy. He wants to create a “startup day one” energy to revive internal innovation. “We need to work as one team,” Tan emphasized to Intel staff. “In areas where we have momentum, we need to double down… In areas where we are behind the competition, we need to take calculated risks to disrupt and leapfrog.”

Tan’s philosophy remains straightforward yet powerful: “Stay humble. Work hard. Delight our customers.” This approach matches his success at Cadence, where he led a cultural transformation centered on customer-centric innovation.

All the same, Tan faces substantial challenges to implement this vision amid Intel’s INTC restructuring and job cuts. After becoming CEO, he acknowledged Intel’s difficult situation: “It has been a tough period for quite a long time for Intel. We fell behind on innovation. As a result, we have been too slow to adapt and to meet your needs.”

Intel Targets Bureaucracy in Restructuring Plan

The lifeblood of Intel’s transformation strategy under new CEO Lip-Bu Tan centers on cutting through red tape. Intel’s job cuts reflect a methodical push to break down what Tan calls organizational complexity that has “been slowly suffocating the culture of breakthroughs we need to win.”

Layers of management to be flattened

Tan moved quickly with structural changes. His first major organizational shift restructured reporting lines. Critical semiconductor groups now report to him directly. This change removes the management layers that kept top executives away from engineering teams.

Three veteran technical executives—Rob Bruckner, Mike Hurley, and Lisa Pearce—have direct access to Tan. This shift shows Tan’s commitment to bringing engineering expertise into leadership discussions. His broader philosophy puts technical leadership at pioneering decision-making.

The restructuring goes beyond senior leadership. Both Intel’s Client Computing Group and Data Center and AI chip group now have a direct line to the CEO. These units represent Intel’s core business. Their direct connection to Tan shows his hands-on style in managing the company’s vital operations.

“I want to roll up my sleeves,” Tan wrote about these key groups. He emphasized his desire to learn firsthand how to make them stronger. This approach marks a clear break from Intel’s old management structure, where multiple layers separated top leadership from operational teams.

Focus on speed and clarity in decision-making

Intel’s bureaucratic processes have stymied its competitiveness, especially in the ever-changing world of artificial intelligence. Tan spotted several of the biggest problems from too much bureaucracy:

• Decision-making processes take too long
• New ideas lack resources to develop properly
• Unnecessary silos create inefficient execution

“Bureaucracy kills innovation,” Tan declared during his keynote at Intel Vision 2025. He showed how small, focused teams create and move faster than Intel’s current structure. “In my career, I have seen how small, focused teams move very fast and innovate and take on incumbents, and we’re going to practice that in Intel,” he added.

The Intel job cuts of 2024 directly target this bureaucratic bloat. Reuters reported that Tan sees the company’s “slow-moving and bloated middle management layer” as a major obstacle. This view matches his broader critique that Intel has lost the “only the paranoid survive” spirit from former CEO Andy Grove’s time.

Tan called for big changes in company operations: “We will reduce layers, eliminate overlapping areas of responsibility, stop non-essential work, and encourage a culture of greater ownership and accountability.” Intel’s INTC restructuring and job cuts aim to build a more responsive organization that creates faster.

Tan told employees that the core team “will be working together in the coming weeks and months to drive the cultural transformation needed to position our business for future success.” He promised to be open about changes and why they happen.

This push to streamline decision-making targets what Tan calls “too much complexity.” His plan includes automating and simplifying processes to cut through bureaucracy that has kept Intel from responding quickly to market changes and competitive pressures.

Engineering Culture Becomes Central Focus

Intel’s organizational overhaul centers on one mission: bringing back the engineering excellence that made the company great. CEO Lip-Bu Tan made it clear: “Under my leadership, Intel will be an engineering-focused company.” This move stands out as vital to Intel’s comeback during ongoing job cuts.

Why Intel lost its engineering edge

Several connected factors gradually stripped away Intel’s technical leadership:

1. Leadership drift from technical roots – The problems started when Intel appointed its first non-engineer CEO, Paul Otellini. His marketing background pulled focus away from technical excellence. Later CEOs continued this pattern by choosing quick wins over long-term technology plans.
2. Cultural complacency – The engineering-driven breakthroughs that built Intel gave way to “a culture of complacency, short-term thinking, and lack of execution”. The company became vulnerable as rivals moved faster.
3. Internal politics over execution – The team abandoned crucial projects like Larrabee, Intel’s shot at developing a GPU like Nvidia’s. One executive described the situation as “crabs fighting amongst themselves” instead of focusing on real competitors.
4. Missed opportunities – The company said no to making iPhone processors in 2007. They also waited too long to adopt extreme ultraviolet lithography (EUV) technology. These decisions set their manufacturing back by about five years.

AMD and NVIDIA accepted new ideas, and their market cap grew beyond $1 trillion. Intel lost ground to these competitors.

Plans to rehire top technical talent

Tan saw these problems and started taking real steps to rebuild Intel’s engineering culture:

The company quietly dropped its controversial no-rehire policy from 2015. This big change opens doors for thousands of skilled engineers who left during the 13,000-person layoffs of 2015-2016.

Tan spends his weekends “filled with meetings with engineers and software architects who have ‘brilliant’ ideas and who ‘want to change the world.'” He shows his steadfast dedication by working directly with technical talent.

He wants to create a “startup culture to create where every day is Day One”. This style differs from the bureaucracy he blamed for killing breakthroughs and creativity.

The 2024 job cuts run deep, but Tan stresses that keeping and attracting core engineering talent remains crucial. His plan shows that Intel’s changes will be “driven not by saying, but by doing.” The company aims to become “engineer-led and accelerated by collaboration, humility, and a relentless customer focus”.

AI Division Faces Strategic Realignment

Intel plans a major overhaul of its artificial intelligence ambitions as part of ongoing restructuring efforts. The chipmaker needs to revamp its AI strategy after struggling against competitors like Nvidia amid the Intel job cuts in the 2024 scenario.

Falcon Shores chip relegated to internal testing

Intel has officially canceled the commercial release of its highly anticipated Falcon Shores GPU for AI and high-performance computing applications. The chip will now serve only as an internal test processor instead of its planned market release later this year. This move shows a dramatic change in Intel’s AI hardware roadmap and alters the company’s competitive stance in the accelerator market.

Former interim co-CEO Michelle Johnston Holthaus stated during an earnings call, “Based on industry feedback, we have decided to leverage Falcon Shores as an internal test chip.” The company will now develop what it calls a “system-level solution at rack scale” with a successor chip named Jaguar Shores.

Gaudi 3 processor remains Intel’s only viable AI solution for the next two years after this change in direction. Market adoption of Gaudi 3 remains limited because of software issues that Intel has acknowledged. The Intel job cuts continue as the company redirects its resources to build a better ecosystem for future AI offerings.

New AI chief appointed to lead transformation

Intel CEO Lip-Bu Tan named Sachin Katti as the company’s new Chief Technology Officer and Chief AI Officer. Katti moves from leading Intel’s networking and edge computing division to oversee the company’s AI strategy, product roadmap, and Intel Labs.

Tan wrote in an internal memo, “As part of this, he will lead our overall AI strategy and AI product roadmap, as well as Intel Labs and our relationship with the startup and developer ecosystems”. This appointment shows Intel’s complete reorganization of its artificial intelligence development approach.

A dedicated AI leadership position fills a long-standing organizational gap. AI initiatives previously fell under Intel’s data center unit before the Intel INTC restructuring and job cuts. This structure made AI projects compete for resources and management attention.

Intel’s new standalone AI division will develop next-generation AI accelerators and optimize data center chips for AI workloads. These Intel job cuts today match Tan’s vision to concentrate resources on areas with the highest growth potential.

Katti’s combined role as CTO and AI chief demonstrates Intel’s belief that merging these functions will drive technological advancement across its product lines.

Manufacturing Overhaul Gains Priority

The lifeblood of CEO Lip-Bu Tan’s turnaround strategy centers on rebuilding Intel’s manufacturing capabilities while the company reduces its workforce. Tan’s review of Intel’s manufacturing processes in late 2023 showed this area needed immediate attention to bring back the company’s competitive edge.

Intel’s lag behind TSMC and Nvidia

Intel dominated chip manufacturing for decades. However, in the last ten years, Taiwan Semiconductor Manufacturing Company (TSMC) became the new leader, especially in making thinner processors. This move happened mainly because of Intel’s mistakes going back to 2014, when new chip architecture launches started falling behind.

The company started falling faster in 2015 under CEO Brian Krzanich.  Intel’s 10nm process faced major delays, which forced them to keep using 14nm processors longer than the usual two-year cycle. Intel made a crucial mistake by not investing enough in extreme ultraviolet (EUV) lithography machines from ASML. Later, under former CEO Pat Gelsinger, Intel spent heavily on ASML equipment.

Manufacturing problems turned out to be one of the most important reasons for Intel’s recent troubles. Intel struggled with long delays moving from 10nm to 7nm processes, while AMD took advantage of TSMC’s advanced 7nm technology to launch its Zen microarchitecture. Cloud providers like Amazon Web Services and Google Cloud then switched to AMD’s chips because they used less energy and offered better performance for the money.

Modernizing fabs to meet AI demand

Tan now puts modernizing Intel’s manufacturing operations at the top of his list. His plan involves finding new customers for Intel Foundry, which builds chips for companies like Microsoft and Amazon. The ongoing job cuts will determine how fast this change can happen.

Tan wants to keep Intel’s factories under company control, with finances and operations separate from the design business. He wants Intel to become a “world-class foundry” again. Market experts think Intel Foundry will succeed if it gets at least two big customers to make large volumes of chips.

This work involves making Intel’s chip manufacturing process more available to potential customers like Nvidia and Google. Tan will likely focus on improving the “yield”—how” many working chips come from each silicon wafer. Intel plans to start mass production of its first in-house chip using the advanced 18A process this year.

Intel says its ambitious plan to develop five nodes in four years stays on schedule. Company leaders believe Intel will lead the industry again with Intel 18A by 2025. The success of Intel’s next generation of AI-enabled chips, Panther Lake, depends heavily on these in-house factories using the new 18A manufacturing process.

The push to modernize manufacturing capabilities becomes more urgent as Intel cuts jobs in 2024 and faces stronger competition in the fast-growing AI processor market.

Intel Sells Altera Stake to Refocus Core

Intel Corporation has made a bold move to sell most of its programmable chip business, Altera, to Silver Lake, a global technology investment firm. This deal marks a crucial step in CEO Lip-Bu Tan’s plan to reshape the struggling chipmaker while reducing its workforce.

51% stake sold to Silver Lake

Silver Lake will acquire 51% ownership of Altera for USD 4.46 billion, valuing the company at USD 8.75 billion. Intel plans to keep the remaining 49% stake, which lets them benefit from Altera’s future growth while freeing up money for core investments. The deal should close in the second half of 2025, after which Intel will remove Altera’s financial results from its consolidated statements.

Altera will become operationally independent and emerge as the largest pure-play FPGA (field programmable gate array) semiconductor solutions company. Marvell’s current president of Products and Technologies, Raghib Hussain, will take over as Altera’s CEO on May 5.

The market reacted positively as Intel’s stock jumped 3.2% after the announcement, showing investor confidence in better liquidity and lower debt levels.

Divestment aligns with core mission

CEO Tan emphasized their commitment: “Today’s announcement reflects our commitment to sharpening our focus, lowering our expense structure, and strengthening our balance sheet.” The sale matches Intel’s broader job cuts and efforts to streamline the organization.

The company has shifted its strategy from diversification to focusing on high-growth areas. Intel now prioritizes its core businesses: CPUs, GPUs, supporting platforms, and chip production. This strategic shift offers several benefits:

• USD 8.75 billion in proceeds will help reduce debt and fund R&D
• The company can focus on profitable ventures like Intel’s Arc GPU line and AI chips
• Simpler structure enables faster decisions and innovation

The deal stands as Tan’s first major initiative to revitalize Intel since becoming CEO. Intel’s evolving approach shows in their statement: “We are investing to transform our traditional IDM model to adapt to an evolving industry… while evolving to engage with the ecosystem in new and different ways”. Beyond financial gains, this strategic move helps Intel streamline product development and exit non-essential businesses while sharpening its focus on the ongoing 2024 transformation.

Leadership Team Undergoes Major Changes

CEO Lip-Bu Tan has quickly reorganized Intel’s executive ranks to create a leaner, more responsive company during ongoing job cuts. He made sweeping changes to the company’s management structure just weeks after taking leadership. These changes point to a fundamental change in Intel’s future operations.

Executive reshuffle under Tan

The new organization has several strategic appointments that show Tan’s focus on bringing technical expertise to senior leadership.  Sachin Katti now leads as both Chief Technology Officer and Chief AI Officer. He will handle Intel’s AI strategy, product roadmap, and Intel Labs. This move brings two crucial functions under one leader.

Tan chose Pushkar Ranade, a longtime company engineer, as his chief of staff and technology advisor. This choice shows Tan’s plan to build a technically strong team as Intel job cuts in 2024 reshape the organization.

Other key personnel changes include:

• David Zinsner staying as CFO with more responsibilities
• Victoria Holroyd-Fogg stepping in as interim chief people officer
• Jeff Dahncke (Chief Communications Officer) and Anthony Lin (Intel Capital) now report directly to Tan

Flattening hierarchy to boost agility

Tan identified excessive bureaucracy as a barrier to Intel’s innovation capabilities. “Organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win,” Tan wrote in an internal memo.

The CEO has created direct reporting lines between himself and key technical executives. Three veteran technical leaders—Rob Bruckner, Mike Hurley, and Lisa Pearce—now report straight to him. Intel’s biggest money-makers—the Data Center and AI Group and the Client Computing Group—also have direct access to Tan.

The job cuts affect this entire realignment. Tan wants to remove middle management layers that slow down decision-making. “This supports our emphasis on becoming an engineering-focused company and will give me visibility into what’s needed to compete and win,” Tan explained.

Intel Job Cuts 2024 Follow Previous Layoffs

Intel announced 15,000 job cuts in August 2024, which started a tough period that led to today’s additional workforce cuts. These earlier cuts help us understand why the company is restructuring now.

15% workforce cut in August 2024

Intel planned to cut around 15,000 jobs in August 2024, which was about 15% of their total employees, as part of their $10 billion cost-saving plan. This was their second big round of layoffs in under a year, coming after they let go of 12,000 people in 2022. We cut jobs mostly in non-manufacturing and non-engineering areas like sales, marketing, and administration.

The company didn’t stop at just cutting jobs. They also took away employee benefits like phone bill payments, car leases, and even the office coffee stations. Pat Gelsinger, who was CEO then, called these changes “some of the most consequential in our company’s history”. He wrote in a memo, “This is painful news for me to share. I know it will be even more difficult for you to read”.

Cumulative effect on company morale

These back-to-back job cuts have hit employee morale by a lot. Two employees from manufacturing warned that these cuts “could dampen already-depressed morale and create chaos”, especially when Intel wants to launch its state-of-the-art 18A manufacturing technology. Employees have privately shared that morale has been “devastated by Intel’s poor financial performance and by cutbacks aimed at returning the business to profitability.”

Intel tried to boost spirits by bringing back free coffee and tea in November 2024. The company’s internal message said, “Although Intel still faces cost challenges, we understand that small comforts are the foundations of our daily routines.” But one former employee didn’t think this was enough and said about the earlier removal of perks, “That’s petty, right? How much does one piece of fruit per day cost?”

Departments Most Affected by Layoffs

Recent analysis of Intel’s job cuts shows certain departments bear the brunt of changes as CEO Lip-Bu Tan pushes his vision for a streamlined, engineering-focused company. The latest round of workforce reductions follows a pattern that targets specific areas of Intel’s operations.

Tech and manufacturing divisions hit hardest

Intel’s previous layoffs in 2024 mostly protected core engineering teams, but the current round takes a different path. The company managed to keep manufacturing roles safe as it pursued its foundry goals. Today’s cuts suggest a strategy change, with technical divisions now seeing major reductions.

The tech division has faced substantial downsizing, which affects various engineering teams working on product development. This marks a clear change from earlier approaches, as the company now reduces engineering staff, among other functions.

Manufacturing facilities in several states have felt the impact heavily. Intel’s largest hub in Oregon lost about 1,300 employees from its Aloha and Hillsboro locations. The Chandler facility in Arizona saw 385 job cuts, while California’s San Jose and Folsom locations together lost 319 workers.

Support roles also impacted

The 2024 cuts go beyond technical divisions to target operational and administrative positions throughout Intel. Human resources departments face major reductions as Tan works to remove bureaucratic layers.

Marketing teams have seen deep cuts, and many campaigns have stopped during the restructuring. Administrative staff in all divisions face reductions as the company streamlines operations.

Middle management positions seem to take the biggest hit. This reflects Tan’s direct criticism of what he called a “slow-moving and bloated middle management layer” when he took charge. The restructuring specifically targets these roles to create direct lines between technical teams and senior leadership.

These focused cuts match Intel’s goal to become more agile while keeping the critical technical skills needed for future breakthroughs, despite how the cuts affect its organizational capabilities.

Intel Job Cuts Today Spark Market Reaction

Intel’s latest workforce reduction plan sparked an immediate reaction in financial markets.  The chipmaker’s shares jumped more than 6% to USD 20.70 when trading began Wednesday. This surge showed that investors backed CEO Lip-Bu Tan’s bold restructuring strategy.

The dramatic stock movement came just one day before Intel planned to release its quarterly earnings report. Wall Street’s response to the company’s cost-cutting measures gave investors an early glimpse of what to expect.  The timing proved crucial since these results would be Tan’s first earnings presentation after taking the helm last month.

INTC

Wednesday’s positive market reaction stood in stark contrast to Intel’s yearly stock performance.  Despite the recent gains, INTC shares have dropped about 40% in value over the last 12 months.  The stock has plunged roughly 47% from its 52-week peak.  Wall Street analysts remain cautious, with their consensus rating for INTC stock at “Hold” based on one Buy, 26 Holds, and four Sells.

The enthusiastic response to job cuts suggests investors see Tan’s restructuring as a crucial step toward financial stability. Shareholders seem to support these tough workforce decisions that could strengthen Intel’s competitive position in the long run, as shown by the double-digit percentage gains.

Market experts disagree about the company’s recovery outlook.  Some analysts believe the workforce cuts are crucial to position Intel for future success.  Others worry about possible setbacks to breakthroughs. The current stock movement might reflect short-term optimism about cost savings rather than faith in Intel’s technological roadmap.

Intel’s average price target among analysts currently sits at USD 22.44 per share, suggesting an 8.25% upside potential from current levels. Despite the positive market response, Intel must turn these cost reductions into sustainable growth while facing fierce competition in the semiconductor market.