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Intel is undergoing significant changes under its newly appointed CEO, Lip Bu-Tan. The company has announced a series of measures aimed at streamlining operations and reducing costs, including layoffs, restructuring, and a mandate for employees to return to the office more frequently.
Sweeping Changes at Intel
In response to a disappointing first-quarter earnings report that sent Intel’s stock down by 5%, CEO Lip Bu-Tan has initiated a comprehensive overhaul of the company’s structure and operations. These changes are designed to address what Tan sees as a bureaucratic culture that stifles innovation.
Workforce Reductions and Restructuring
Intel plans to implement an unspecified number of layoffs, beginning in the second quarter and continuing over the coming months. This move follows a previous reduction of 15% of the workforce in August 2024. Some rumors suggest this round of cuts could affect up to 20,000 employees.
$1.5 Billion Cost Reduction Target
The company aims to slash operating expenses by $1.5 billion over the next two years. Intel plans to reduce expenses to $17 billion in 2025 and further to $16 billion in 2026.
Management Overhaul and Return to Office Mandate
Tan has already restructured the upper management and intends to eliminate additional layers to create a leaner, more efficient organization. The company is also tightening its return-to-office policy, requiring employees to be on-site four days a week, starting September 1.
Furthermore, Intel will focus on reducing internal administrative tasks, such as unnecessary meetings, and will make certain goal-setting requirements optional.
A Vision for the Future
CEO Tan has outlined an ambitious vision for Intel’s future, emphasizing the need to reinvent the company and drive innovation. He acknowledged that these changes will involve tough decisions but are necessary to better serve customers and build a new Intel for the future.
“It’s going to be hard. It will require painful decisions. But we will make them knowing it’s what we must do to serve our customers better as we build a new Intel for the future,” Tan stated.
These strategic shifts mark a significant turning point for Intel as it navigates a rapidly evolving technological landscape.