Intel, newly appointed CEO Lip-Bu Tan has announced plans to reduce the company's workforce by over 20%, amounting to approximately 21,000 jobs. This decision marks a continuation of previous layoffs and is part of a broader strategy overhaul aimed at revitalizing the company's structure and performance . The restructuring seeks to eliminate bureaucratic layers and enhance operational efficiency, particularly within Intel's data center, AI, and PC chip divisions. These divisions will now report directly to Tan, emphasizing a return to an engineering-driven culture .
The layoffs are part of a broader strategy to refocus on an engineering-driven culture, the report said.
Intel did not immediately respond to a Reuters request for comment.
The layoffs mark the first major move under new CEO Lip-Bu Tan, who took over last month to revive the struggling Silicon Valley chipmaker after years of challenges.
Mass layoffs could have severe consequences in Oregon, Intel’s largest operating hub. The company employs 20,000 workers in Washington County, more than any other business in the state. Semiconductors are Oregon’s most valuable product and its major export.
Intel reports quarterly financial results Thursday afternoon. The chipmaker has scheduled an all-hands meeting with Tan for Friday morning. Intel employed about 109,000 workers worldwide at the end of 2024.
Lip-Bu Tan has previously announced his intention to shed non-core assets and focus on creating more competitive products. Last week, Intel sold 51% of Altera's programmable chip division to investment firm Silver Lake Management.
Tan is looking for a new strategy to address the emerging demands and challenges of the AI domain. He has also been reported to relate staff cuts to a slow-moving and loathed middle management layer. The CEO is also found saying the company needs to make ‘tough decisions’. 
This strategic realignment comes in response to mounting pressures from competitors such as Nvidia in the AI chip market. Tan's initiative includes not only workforce reductions but also asset sales and a renewed focus on core product development . The intent is clear: streamline operations and foster innovation while addressing high costs that have plagued the company in recent years. As Intel navigates this transformative phase, its ability to adapt will be crucial for regaining market leadership .
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