Market Analysis

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Intel is set to announce plans to cut more than 20% of its workforce this week, aiming to streamline operations and reduce bureaucratic inefficiencies, according to Bloomberg News, citing a source familiar with the matter.

The layoffs are part of a broader effort to refocus the company on an engineering-driven culture. Intel did not immediately comment on the report.

This move marks the first major action under new CEO Lip-Bu Tan, who took over last month with the goal of reviving the company, which has faced several challenges in recent years.

Tan had previously indicated that he was considering significant changes to Intel’s chip manufacturing processes and artificial intelligence (AI) strategies. His new plan includes restructuring Intel's AI approach and cutting staff to address what he described as a sluggish and inefficient middle management layer. In a town hall meeting shortly after his appointment, Tan emphasized that the company would need to make "tough decisions."

Last week, reports revealed that Tan was flattening Intel's leadership structure, with key chip divisions now reporting directly to him.

The upcoming layoffs follow a previous round of job cuts in August 2023, when Intel announced plans to eliminate 15% of its workforce, or about 15,000 positions.

These 2024 layoffs are part of a broader $10 billion cost-cutting initiative aimed at addressing high expenses, shrinking margins in Intel’s core PC and data center businesses, and a costly shift toward AI chips—an area where Intel has lagged behind competitors like Nvidia.

Intel, based in Santa Clara, California, had 108,900 employees at the end of 2024, according to its filing.

The company is set to report its first-quarter results on Thursday.

Paraphrasing text from "Reuters" all rights reserved by the original author