Intel Corp. is expected to reveal plans this week for a substantial workforce reduction impacting more than 20% of its global staff, according to reports citing people familiar with the company’s internal discussions.
Such a move, potentially affecting over 21,000 employees based on year-end 2024 figures, would signify the first major restructuring action by CEO Lip-Bu Tan since he took the helm last month. The reported rationale includes streamlining management, cutting through organizational bureaucracy, and re-centering the company around engineering principles. If enacted, a cut of this magnitude would represent one of the larger staff reductions seen in the tech sector recently.
The anticipated announcement precedes Intel’s first-quarter earnings call, scheduled for after the market closes this Thursday, April 24, 2025, where Tan is expected to detail more of his strategic direction. This potential action follows a previous reduction of approximately 15,000 jobs announced back in August 2024, which brought the company down from 124,800 employees at the end of 2023 to about 108,900 globally at the close of 2024. An Intel representative declined to comment on the layoff reports.
A New Leader Tackles Lingering Problems
Lip-Bu Tan, a veteran of Cadence Design Systems with extensive venture capital experience, became Intel’s chief executive on March 12, succeeding Pat Gelsinger, who departed in late 2024 amid challenges in executing his own turnaround strategy.
Tan inherited a semiconductor giant grappling with considerable difficulties. Intel’s financial performance has been strained, marked by an $18.8 billion net loss for 2024 – its first yearly deficit since 1986.
While the company’s foundry division was a major contributor, accounting for $13.4 billion of those losses, Intel’s traditional core businesses in PC (Client Computing) and Data Center/AI chips have also faced intense competitive pressure, adding to the overall financial strain. Reflecting these struggles, Intel’s stock has depreciated significantly over the last five years, leading to its removal from the Dow Jones Industrial Average in November 2024.
Even before these layoff reports emerged, Tan had moved to reshape the organization. A recent restructuring flattened the company’s hierarchy, with key divisions reporting directly to him, and Sachin Katti was appointed to lead a combined technology and AI strategy.
Tan explained the rationale in an internal memo, stating, “It’s clear to me that organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win.” He added, “I want to roll up my sleeves with the engineering and product teams so I can learn what’s needed to strengthen our solutions.”
This follows Tan’s stated strategy to focus Intel and spin off non-core units, such as the recently announced agreement to sell a majority stake in its Altera unit to Silver Lake.
Manufacturing and Technology Hurdles Persist
Operational execution has been a persistent challenge for Intel. The company’s high-profile $28 billion project to build new factories in Ohio, intended to lead a resurgence in US chip manufacturing, has seen its operational start date pushed back repeatedly to at least 2030, despite Intel being a major recipient of US CHIPS Act funding.
These manufacturing delays amplify the importance of successfully ramping up Intel’s next-generation 18A process node. The 18A node incorporates new technologies like RibbonFET transistors (which feature gates wrapping around the channel for better control) and PowerVia backside power delivery (moving power wiring to the underside of the wafer to improve signal integrity and density), features essential for attracting external customers to its foundry services.
Adding to the internal pressure, the possibility of a strategic manufacturing partnership seemed to fade when TSMC CEO C.C. Wei, during an earnings call on April 17, explicitly denied any ongoing joint venture discussions with Intel, stating, “TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology.” This leaves Intel largely reliant on its own execution to close the gap with competitors.
Navigating Competitive and Product Landscapes
Intel has also struggled to maintain leadership in key product segments. The company lagged in addressing the AI computing surge, where Nvidia currently holds a dominant position. Intel’s own Gaudi AI accelerators have faced challenges in market adoption, and the company canceled its Falcon Shores AI chip project in January 2025 to refocus its AI hardware efforts.
Even in its core PC market, recent product launches like the Arrow Lake desktop processors encountered initial stability problems requiring firmware updates late last year. While Tan expressed confidence in Intel’s ability to overcome these issues in his initial message to employees upon becoming CEO – “That’s not to say it will be easy. It won’t be. But I am joining because I believe with every fiber of my being that we have what it takes to win.” – the potential scale of the reported job cuts highlights the considerable task ahead for Intel as it seeks to streamline operations and regain its footing.
