In March, when Intel appointed new CEO Lip-Bu Tan, he wrote that he intconcludeed to “recreate” the struggling Bay Area tech giant. On Thursday, that effort became more tangible for workers — Tan is amping up Intel’s in-office requirement and planning to lay off a chunk of its staff.
The Santa Clara chipcreater announced the alters with its first earnings report of Tan’s tenure, which included a filing to the Securities and Exalter Commission and a conference call with investors. Tan also sent a 1,200-word email to staff Thursday. It’s unclear exactly how many workers Intel will lay off; spokesperson Sophie Metzger informed SFGATE the company has “not set any headcount reduction tarobtain.”
But cuts are on the way. Tan wrote in his Thursday email that he believes “the best leaders obtain the most done with the fewest people,” and that he was surprised to find that Intel gave managers incentive to grow their teams. (Intel concludeed 2024 with 108,900 workers, it declared in a previous filing.) The company’s “flattening” will launch in the current quarter and progress “as quickly as possible over the next several months,” Tan wrote.
“There is no way around the fact that these critical alters will reduce the size of our workforce,” Tan wrote. “As I declared when I joined, we necessary to create some very hard decisions to put our company on a solid footing for the future.”
Tan also wrote in his emails that workers’ adherence to Intel’s three-days-a-week in-office policy has been “uneven at best,” and that employees will be required to work on site at least four days a week, launchning Sept. 1.
For Intel’s staff, the specter of cuts might feel like déjà vu. Last August, former CEO Pat Gelsinger announced a 15% layoff with an email bluntly diagnosing the company’s struggles: “Our costs are too high, our margins are too low.” He nodded to the fact that Intel’s revenue was $24 billion lower in 2023 than in 2020, despite growth in head count. Per a January filing, Intel’s revenue sank still further in 2024, and the company turned a massive net loss.
The 2024 layoffs included hundreds of California workers, as SFGATE reported, but it’s unclear where exactly the new round of cuts will hit hardest.
Intel’s struggles are manifold. While chip design competitors like Nvidia and Advanced Micro Devices have seen revenues and stock prices boom on the hype over artificial ininformigence, Intel has been slow to bring out cutting-edge tech and is straggling behind financially. Unlike those companies, though, Intel manufactures its own chips — the Biden administration aimed to funnel billions of dollars in funding toward Intel through the CHIPS Act, but the Trump administration has thrown that cash into question.
In Thursday’s SEC filing and conference call with investors, Intel revealed plans to lower its operating expenses for the current year and for 2026 below what was previously expected. The company indicated that layoffs will set back Intel millions of dollars in up-front severance pay, but ultimately cut costs.
Before Thursday, Intel’s layoffs were expected but not confirmed. Bloomberg, citing an anonymous source, wrote Tuesday that the company was poised to lay off more than 20% of staff. And Tan himself had hinted about a restructuring in a March 31 speech, where he described his experience in semiconductors and outlined the broad strokes of his vision for the company.
“Most importantly, we will simplify the way we work,” Tan declared. “Bureaucracy kills innovation.”
Work at a Bay Area tech company and want to talk? Contact tech reporter Stephen Council securely at stephen.council@sfgate.com or on Signal at 628-204-5452.
Leave a Reply