Intel is set to announce plans this week to lay off more than 20% of its workforce, in a sweeping effort to cut bureaucracy and revive its struggling operations, according to a source familiar with the matter.
The layoffs are part of new CEO Lip-Bu Tan’s broader initiative to streamline management and rebuild Intel’s once-strong engineering-driven culture. Tan, who took over last month, is overseeing what would be Intel’s first major restructuring under his leadership. The person sharing the information requested anonymity, as the plans are not yet public.
This move follows a significant round of layoffs last August that affected roughly 15,000 employees. At the end of 2024, Intel’s workforce stood at 108,900 — down from 124,800 the previous year. An Intel spokesperson declined to comment on the current restructuring plans.
Following the news, Intel shares rose as much as 3.5% in premarket trading on Wednesday, though the stock has fallen about 43% over the past 12 months, closing at $19.51 on Tuesday.
Tan’s turnaround mission comes at a time when Intel has lost ground to competitors, particularly in the booming field of artificial intelligence (AI). Once a dominant force in the chip industry, Intel has suffered three consecutive years of declining sales and growing losses, as rivals like Nvidia surged ahead.
A former executive at Cadence Design Systems, Tan has pledged to focus Intel’s efforts on core operations, spin off non-essential assets, and deliver more competitive products. Last week, Intel sold a 51% stake in its programmable chip unit, Altera, to Silver Lake Management, in line with Tan’s strategy.
At last month’s Intel Vision conference, Tan emphasized the need to replenish engineering talent, strengthen the company’s balance sheet, and realign its manufacturing with market demands.
Intel is expected to report its first-quarter earnings on Thursday, offering Tan a platform to expand on his strategic vision. While analysts believe the worst of the company’s revenue slump may be over, a return to former sales levels is not anticipated in the near future.
Tan’s appointment followed the departure of Pat Gelsinger, who stepped down last year after struggling to execute his own turnaround plan. Gelsinger’s ambitious — and costly — attempt to transform Intel into a contract chip manufacturer and expand its global production footprint fell short. Projects such as a massive new plant in Ohio, once touted as the world’s largest chip facility, have now been delayed.
Intel had also been expected to benefit significantly from the 2022 CHIPS and Science Act. However, with the program now in flux under President Donald Trump’s administration, its future remains uncertain.
A potential manufacturing partnership with Taiwan Semiconductor Manufacturing Company (TSMC) has also dimmed. TSMC CEO C.C. Wei recently stated that the company would remain focused on its own operations, dampening speculation of collaboration with Intel.
In the meantime, Intel has missed the biggest technological wave to hit the semiconductor industry in decades — AI. Once a leader in PC and data center chips, Intel was slow to pivot to AI, allowing Nvidia to dominate the space and become the world’s most valuable chipmaker, with revenue now surpassing Intel’s.
Gelsinger previously acknowledged that Intel had lost its competitive edge and was too slow to respond to market shifts. But he wasn't given the time he insisted was necessary to fix it. Now, the responsibility falls to Tan, who in his first public remarks as CEO last month, warned that the turnaround would be a long and difficult journey.
“It won’t happen overnight,” he said. “But I know we can get there.”
