Intel’s new CEO Lip-Bu Tan has confirmed the company will be cutting its headcount in response to sluggish revenue.
In an investor call, reported by Seeking Alpha, Tan said: “The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth.
“I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”
What he means by this was expounded upon in an email to employees, since published on the company’s website. In it, he reiterated his desire to refocus the company on engineering, which, he said, is why he “elevated our core engineering functions to the ET (executive team)”.
“As we refocus on engineering, we will also remove organizational complexity. Many teams are eight or more layers deep, which creates unnecessary bureaucracy that slows us down,” he said.
Tan added that he had been “surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams” adding that this would no longer be the case.
“I’m a big believer in the philosophy that the best leaders get the most done with the fewest people,” he said.
Acknowledging the natural outcome of this decision, Tan said there was “no way around the fact that these critical changes will reduce the size of [Intel’s] workforce”. This will start in Q2, he said, with the company moving “as quickly as possible over the next several months”.
While no solid numbers were laid out in this email or the earnings call, Bloomberg previously reported it could be around 21,000 employees, or 20% of its workforce. This follows 15,000 redundancies made in August 2024, one of outgoing CEO Pat Gelsinger’s final strategic decisions before he left the company in December that year.
Cutting bureaucracy and hybrid hours
In addition to the headcount reductions, Tan also said he would be instructing team leaders to reduce the number of both meetings and meeting attendees.
“It has been eye-opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward,” Tan said, adding that “too much valuable time is being wasted”.
In common with many of his tech CEO peers, Tan is requiring employees to spend more time in the office but stopped short of implementing a full return to office mandate. Instead, Intel will require staff to attend the office four days a week by 1 September.
In common with many other return-to-office mandates, Tan cited collaboration between employees as the primary reason behind this change, saying facilities should be “vibrant hubs of collaboration that reflect our culture in action”.
“When we spend time together in person, it fosters more engaging and productive discussion and debate. It drives better and faster decision-making. And it strengthens our connection with colleagues,” he said.
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