Intel to Announce Plans This Week to Cut Over 20% of Staff

Intel Reportedly Planning Significant Job Cuts

Intel Corp. is reportedly gearing up for a substantial reduction in its workforce. According to a source familiar with the matter, the company plans to announce cuts affecting over 20% of its staff this week.

The driving force behind this move is to eliminate bureaucratic layers within the struggling chipmaker.

Restructuring Under New Leadership

This potential restructuring is intended to streamline management and foster a renewed engineering-focused culture. The source, who requested anonymity due to the private nature of the plans, indicated that this would mark the first major restructuring initiative under the leadership of the new Chief Executive Officer, Lip-Bu Tan, who assumed the position last month.

Background on Previous Cuts

These anticipated cuts follow a previous effort last year where Intel aimed to reduce its workforce by approximately 15,000 jobs, as announced in August. At the close of 2024, Intel’s employee count stood at 108,900, a decrease from the 124,800 employees the previous year.

When contacted for comment, an Intel representative declined.

Market Reaction

Despite the news, Intel shares saw a surge of up to 6.5% in New York trading on Wednesday, marking their most significant intraday gain in over a week. However, the stock has experienced a decline of roughly 40% in the past year and closed at $19.51 on Tuesday.

Turning the Tide

Tan’s primary objective is to revitalize the iconic chipmaker, particularly after several years of losing ground to competitors. The Santa Clara, California-based company has faced challenges in maintaining its technological advantage and has struggled to compete with Nvidia Corp. in the realm of artificial intelligence computing. This has contributed to three consecutive years of declining sales and increasing financial losses.

Strategic Moves Ahead

Tan, a seasoned executive from Cadence Design Systems Inc., has expressed his commitment to divesting Intel assets that are not core to the company’s mission and to developing more innovative and compelling products. Last week, Intel took a step in this direction by agreeing to sell a 51% stake in its programmable chips unit, Altera, to Silver Lake Management.

Looking to the Future

During the Intel Vision conference last month, Tan emphasized the company’s need to replenish its engineering talent pool, strengthen its balance sheet, and better align its manufacturing processes with the needs of potential customers.