Intel will announce plans to slash more than 20 per cent of its workforce this week to reduce bureaucracy and revive its engineering-focused culture.
The restructuring is the first big shake-up since newly hired Chief Executive Officer (CEO) Lip-Bu Tan took office last month, Bloomberg reports, citing sources familiar with the situation.
It follows a previous round of layoffs in August that resulted in the loss of nearly 15,000 positions. According to the estimate, by the end of 2024, Intel's employment had fallen to 1,08,900 employees, down from 1,24,800 the previous year.
CEO Lip-Bu Tan is striving to turn around Intel's fortunes after years of losing ground to competitors. Formerly the market leader, the chipmaker has fallen behind in crucial areas such as artificial intelligence (AI), particularly against Nvidia, resulting in three consecutive years of dropping revenue and widening losses.
Tan, a Cadence Design Systems veteran, has committed to refocusing Intel by cutting non-core businesses and producing more competitive products. As part of this approach, the corporation recently decided to sell a 51 per cent share in Altera, its programmable chip unit, to Silver Lake Management.
Intel is scheduled to disclose its first-quarter profits on Thursday, giving Tan an important opportunity to further clarify his strategic vision.
While analysts believe Intel's greatest revenue drops are now in the past, Wall Street does not anticipate the company to return to its old sales levels anytime soon, if at all, according to the report.
