• Intel CEO Lip-Bu Tan did indeed announce that Intel would be reducing its workforce but didn’t say by how much.
• This is part of a vision Tan has to make Intel a technology superpower as it once was.
• Intel will restructure its operations to put engineering at the core while cutting out pointless corporate tasks that don’t move the company forward.

Earlier this week Bloomberg spoke with somebody at Intel who reported that the company was preparing to layoff 20 percent of its workforce. The thinking was that chief executive Lip-Bu Tan would announce the layoffs during the first quarter earnings presentation, and he did, sort of.

As is the case in many of these instances where employees face retrenchment, Tan spoke in a roundabout way, hinting at potential layoffs rather than declaring it would be happening outright.

“The first quarter was a step in the right direction, but there are no quick fixes as we work to get back on a path to gaining market share and driving sustainable growth,” said Tan. “I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products. We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”

To that end, Intel is revising its non-Generally Accepted Accounting Principles (GAAP) operating expenses down from $17.5 billion down to $17 billion this year and $16.5 billion in 2026. These expenses include research and development, marketing, general and administration costs.

But it was a memo that Tan sent out to all employees after the results were presented where Tan announced that Intel would be reducing the size of its staff although he didn’t say by how much.

“We need to build on this progress — and it won’t be easy,” Tan said of the results. “We are navigating an increasingly volatile and uncertain macroeconomic environment, which is reflected in our Q2 outlook. On top of that, there are many areas where we must improve. We need to confront our challenges head-on and take swift actions to get back on track.”

“As I have said, this starts by revamping our culture. The feedback I have received from our customers and many of you has been consistent. We are seen as too slow, too complex and too set in our ways — and we need to change,” the CEO stated.

It was suggested that managers may be on the chopping block here and Tan’s memo heavily suggests the same. The CEO says that structural changes at Intel will be implemented to remove “burdensome workflows and processes that slow down the pace of innovation”. Anybody who has worked in a corporate environment can attest to the fact that middle-management can often get in the way of efficiency rather than contribute to it. It seems Tan is acutely aware of this as well stating that Intel is bogged down with administrative work that doesn’t move the progress needle at all.

“I am instructing our leaders to eliminate unnecessary meetings and significantly reduce the number of meeting attendees. Too much valuable time is being wasted. We will also modernize processes with a focus on live dashboards and better data to ensure we have the real-time insights we need to make better and faster decisions,” said Tan.

As for employees who keep their jobs, Intel will now require those workers to come into the office four days a week from 1st September. This lead time isn’t just for employees, it also gives Intel time to prepare these offices for an influx of workers so they aren’t sitting in a dark office with no WiFi.

Whether this pursuit of a new, leaner, innovative Intel will work out is unknown but Tan appears to have a fire in his eyes. As he rightly says, Intel was once a leader in the tech space and it can get back to that, if it makes smart decisions.

Right now the company is being eclipsed by the competition largely due to the fact that AI is in its hey-day. But the technology market changes fast and if Intel can put itself in a position where it can take advantage of new developments while also maintain its core business, it may come out of this storm smelling of roses.

If it can’t though, well we doubt AMD, NVIDIA and Qualcomm will shed a tear and given the public opinion of Intel, neither will consumers.