Intel to slash 20% of workforce in bold restructuring move

The upcoming layoffs are driven by rising operational costs, shrinking margins in Intel's PC and data center sectors, and increased AI chip investments, as CEO Tan overhauls the strategy to compete with rivals like Nvidia in AI

Intel is preparing to lay off more than 20% of its global workforce, as part of a broad restructuring strategy aimed at streamlining operations, cutting costs, and reviving its engineering-driven culture under new CEO Lip-Bu Tan.

The move comes just weeks after Tan assumed leadership, following years of stagnation and strategic missteps at the Silicon Valley-based chipmaker. According to reports citing a source familiar with the matter, the layoffs are focused on reducing bureaucracy, flattening Intel’s leadership structure, and accelerating innovation.

Intel has not officially commented on the planned layoffs, but internal messages and recent leadership changes suggest a major transformation is underway. More recently, Tan restructured reporting lines, bringing several chip development groups directly under his oversight. In a company-wide town hall, he told employees that Intel needed to make “tough decisions” to become more agile and competitive.

Cost-cutting and AI focus prompt job losses

This marks the second significant workforce reduction in less than a year. In August 2024, Intel announced plans to cut 15% of its jobs—around 15,000 positions—as part of a $10 billion cost-saving initiative. The company ended last year with nearly 109,000 employees.

The upcoming cuts are being driven by rising operational costs, shrinking profit margins in Intel’s PC and data center businesses, and increased investment in artificial intelligence chips. Intel has been trailing competitors like Nvidia in the AI space, prompting Tan to overhaul its strategy and refocus on core engineering strengths.

As the semiconductor landscape rapidly evolves, Intel’s aggressive restructuring is seen as a critical step toward regaining relevance in a market where speed, innovation, and cost-efficiency are paramount. An official announcement is expected soon.