Intel will this week announce sweeping cuts of more than 20% of its staff in a radical attempt to streamline operations and refocus on its engineering heritage. The chipmaker’s largest restructuring plan in decades targets mainly management layers and non-core businesses, marking a back-to-basics strategy as it fights intense competition from AMD and Nvidia.
Sources indicate the reductions will cut thousands of jobs worldwide, with a focus on eliminating bureaucratic bloat that has hindered decision-making. The action comes as CEO Pat Gelsinger drives his vision of reclaiming Intel’s technical leadership through heavy spending on U.S. chip factories and next-generation processor architecture while fighting economic headwinds.
Workers were expecting the news following Intel’s suspension of hiring in July and warning of “targeted” department reductions. The cuts represent a turning point for Gelsinger’s turnaround plan, which aims to eliminate $10B of expenses by 2025 and invest savings in R&D and manufacturing growth.
Industry observers view this as Intel’s most forceful effort so far to rid itself of its “corporate bloat” and regain the innovative culture that once made it the unchallenged ruler of semiconductors. But the price in human terms may be high, with entire groups potentially disbanding overnight in this high-risk reboot.
Key Details:
• Layoffs surpass 20,000 workers based on current 110,000 workforce
• Management, HR, and marketing departments facing deepest cuts
• Gelsinger to personally announce plan in Thursday town hall
• Severance packages expected to include extended healthcare benefits
• Comes weeks after Q2 earnings showed 22% profit drop YoY
