Intel (INTC) CEO Lip-Bu Tan started his first quarterly earnings presentation at the helm of the troubled chipmaker by announcing a major workplace overhaul that aims to boost innovation.
The chief executive said he’s restructuring Intel with the top leadership of “ all critical product manufacturing” teams directly reporting to him. Tan is also mandating a four-day return to office policy effective in the third quarter.
Tan said Intel is focused on “bringing back critical lost talent, and recruiting new people.” The company has suffered from high turnover among executives in recent years.
At the same time, Intel is reportedly planning to cut 20% of its workforce, though the company did not confirm the cuts in a call with analysts. The job eliminations would follow 12,000 job cuts announced in 2022 and an additional 15,000 reported in 2024.
“ We will empower smaller teams to move faster and make better decisions, and we will significantly reduce the number of layers that get in the way,” Tan said.
Intel CFO David Zinsner said that simplifying the company’s organizational structure helped lower its guidance for operational expenditures by $500 million, with the chipmaker expecting to spend $17 billion in 2025.
Intel reported its first quarter earnings after the bell on Thursday, beating Wall Street’s expectations on the top and bottom lines, but its disappointing outlook sent the stock plummeting in after-hours trading, Yahoo Finance’s Dan Howley reported.
Shares of Intel fell more than 6% following the announcement but pared losses after Tan’s commentary. The stock is down 38% over the past 12 months.
Intel — the only US chip manufacturer capable of producing leading-edge semiconductors at scale — has struggled over the past several years to keep up in an increasingly AI-dominated market.
The company has lost market share to rival Advanced Micro Devices (AMD) as its burgeoning manufacturing business bleeds cash and strains financials.
Former executives have argued that Intel’s decline — which they contend is the result of poor decision making and a long series of critical missteps — is partly due its oversized workforce. These execs told Yahoo Finance in March that cutting back middle management could help Intel achieve a turnaround.
On the other hand, two current employees in Intel’s manufacturing business previously told Yahoo Finance that staffers were anxious and bracing for layoffs. The employees said cuts could dampen already-depressed morale and create chaos just as Intel attempts to introduce 18A, a highly anticipated new manufacturing technology, that could put it ahead of leading contract chip manufacturer TSMC (TSM).
