Intel’s Bold Strategy: 20% Job Cuts for a Stronger Future

Intel Corporation, a big chipmaker, is planning to cut more than 20% of its workforce to make the company more efficient and less bureaucratic. This move comes as Intel struggles to keep up with its competitors. A source revealed that this would be the first major change under the new CEO, Lip-Bu Tan, who took charge last month.

Last year, Intel laid off about 15,000 employees. The company had around 108,900 workers at the end of 2024, down from 124,800 in the previous year. Intel’s shares went up by 3.5% in early trading, but the stock has dropped about 43% over the past year, closing at $19.51 recently.

Tan wants to improve Intel’s standing in the market, as the company has been losing ground to rivals like Nvidia in artificial intelligence (AI) computing. This has led to three years of declining sales and increasing financial losses.

To help turn things around, Tan plans to sell parts of Intel that aren’t necessary for its main business and focus on creating better products. For example, last week, Intel sold a 51% stake in its programmable chips unit to Silver Lake Management as part of his strategy.

Tan also mentioned that the company needs to attract back engineering talent that has been lost, improve its finances, and better align its manufacturing with customer needs. Intel is expected to announce its first-quarter results soon, giving Tan a chance to explain his plans in more detail.

The previous CEO, Pat Gelsinger, who was fired last year, had a difficult time trying to bring the company back to its former glory. He tried to grow Intel’s manufacturing network but faced delays and challenges along the way. There were even talks of a partnership with Taiwan Semiconductor Manufacturing Co., but it seems unlikely now.

Intel missed out on the growing demand for chips used in AI, allowing Nvidia to become a top player in the market. Gelsinger acknowledged that Intel lost its competitive edge and didn’t react quickly enough to changes in the market. Tan stated that fixing the issues will take time, but he believes it can be done.