Intel CEO Lip-Bu Tan unveiled sweeping changes during the company's recent earnings call, including extensive job cuts, stricter office attendance requirements, and substantial spending reductions aimed at streamlining operations.
The restructuring plan could result in over 20,000 employees losing their positions, representing approximately 20% of Intel's workforce. The layoffs are scheduled to begin in the second quarter of 2025. This follows previous workforce reductions, including 15,000 positions cut last August and additional layoffs throughout late 2024 and early 2025.
In a notable shift for workplace policies, Intel's hybrid workers will need to increase their office attendance from three to four days per week starting September 1. Tan maintains this change will boost collaboration and productivity, though such claims remain contested in workplace studies.
The tech giant aims to slash operating expenses by $500 million in 2025 and $1 billion in 2026, bringing total expenses down to $17 billion and $16 billion respectively. These cuts will impact research & development, marketing, and administrative departments.
Tan also addressed organizational inefficiencies, noting that bureaucracy was "suffocating innovation and agility." He plans to reduce management layers, which currently extend to eight or more levels in many teams. Additional changes include reducing unnecessary meetings and streamlining administrative work.
The announcements came as Intel reported first-quarter revenue of $12.67 billion, slightly down year-over-year but exceeding analyst expectations. However, second-quarter projections fell below market forecasts, with expected revenue between $11.2 billion and $12.4 billion.
The company also disclosed production capacity shortages for its Intel 7 process node, expected to continue as customers opt for older, more affordable chips over newer AI-focused products during economic uncertainty.