In a significant move to streamline operations and refocus on core competencies, Intel is reportedly planning to lay off more than 21,000 employees, accounting for approximately 20% of its global workforce. This announcement is expected later this week, coinciding with the company’s upcoming first-quarter earnings report.
Strategic Shift Under New Leadership
The layoffs mark the first major restructuring initiative under Intel’s new CEO, Lip-Bu Tan, who assumed leadership in March 2025 following the retirement of Pat Gelsinger. Tan, a veteran in the semiconductor industry, previously served as CEO of Cadence Design Systems. His appointment signaled a strategic shift aimed at revitalizing Intel’s competitive edge in the rapidly evolving tech landscape.
Tan’s vision for Intel involves transforming the company into a more agile, engineering-focused organization. He has emphasized the need to eliminate bureaucratic inefficiencies and foster a culture centered on innovation and product development. The planned workforce reduction is a critical component of this broader strategy to reposition Intel in the face of mounting competition from rivals like Nvidia and AMD.
Context and Precedents
This impending round of layoffs follows a previous reduction in August 2024, when Intel announced plans to cut 15% of its workforce, equating to approximately 15,000 jobs. That move was part of a $10 billion cost-saving initiative aimed at addressing high expenses and shrinking margins in Intel’s core PC and data center units.
Despite these efforts, Intel has continued to face challenges, including declining revenues and a loss of market share in key areas such as AI chip development. The company’s stock has reflected these struggles, with shares down approximately 40% over the past year.
Operational and Market Implications
The planned layoffs are expected to target middle management positions, which Tan has described as bloated and slow-moving. By reducing layers of bureaucracy, Intel aims to accelerate decision-making processes and enhance operational efficiency.
Analysts suggest that this restructuring could improve Intel’s agility and responsiveness in a highly competitive market. However, the scale of the layoffs also raises concerns about potential disruptions to ongoing projects and the morale of remaining employees.
Financial Outlook and Investor Response
Investors have reacted positively to the news, with Intel’s stock experiencing a notable surge following reports of the planned layoffs. The market appears to view the restructuring as a necessary step toward revitalizing the company’s financial performance and long-term viability.
The upcoming earnings report will provide further insight into Intel’s financial health and the anticipated impact of the restructuring efforts. Stakeholders will be closely monitoring the company’s performance metrics and strategic direction under Tan’s leadership.
Conclusion
Intel’s decision to lay off over 21,000 employees represents a significant turning point for the company as it seeks to navigate a complex and rapidly changing technological landscape. Under the new leadership of CEO Lip-Bu Tan, Intel is undertaking bold measures to streamline operations, reduce costs, and refocus on engineering excellence. While the layoffs present immediate challenges, they also signal a commitment to transformative change aimed at securing Intel’s position in the future of the semiconductor industry.
