Intel Cuts 20% Jobs: Can Lip-bu Tan’s Ai Bet Resurrect A Stumbling Intel?

With its bequest connected nan line, nan spot giant’s drastic restructuring reveals a institution fighting to redefine its spot successful an AI-dominated world.

Intel has announced a workforce simplification of complete 20%, impacting much than 21,000 employees, arsenic portion of a restructuring led by caller CEO Lip-Bu Tan, per Bloomberg.

With a $19 cardinal nonaccomplishment successful 2024 and gross falling to $53.1 billion, nan chipmaker intends to streamline management, trim $10 cardinal successful costs, and refocus connected AI chips and foundry services, competing pinch Nvidia, AMD, and TSMC, nan study said.

Tan’s restructuring, nan biggest workforce simplification successful nan chipmaker’s history, follows 2024’s layoff that impacted 15,000 employees, bringing nan headcount down to 108,900 from 124,800. The existent cuts, targeting mediate management, bespeak Tan’s push to reconstruct an engineering-led civilization and reposition Intel amid mounting pressure. Once a semiconductor icon, Intel is undergoing a extremist displacement to meet AI-driven demands and modern IT infrastructure needs.

In his efforts to streamline Intel, Tan is shedding non-core assets, starting pinch nan waste of a 51% liking successful Altera to Silver Lake. He said nan move reflects Intel’s committedness to sharpening its attraction and lowering its disbursal structure. Tan besides highlighted nan request to rebuild engineering talent, fortify nan equilibrium sheet, and amended align manufacturing pinch customer demands.

Intel’s caller promotion of Sachin Katti to CTO and AI main reflects urgency to adjacent nan AI gap, though analysts position these executive changes arsenic portion of a “monumental uphill battle.” 

These moves reflector a broader inclination successful tech, pinch complete 22,000 jobs trim successful 2025 alone, continuing nan 2024 activity of layoffs. The displacement towards cost-cutting and AI automation signals accelerated changes successful nan industry.

Remaking a spot giant

The world semiconductor marketplace is undergoing a melodramatic shift, driven mostly by nan AI boom. As per Gartner, it deed $655.9 cardinal successful 2024 — up 21% from 2023. Nvidia climbed to nan apical spot, dethroning some Samsung and Intel, acknowledgment to explosive request for its GPUs, now powering astir AI workloads.

Intel now faces a steep climb and is making bold moves to reclaim relevance. Analysts position these steps arsenic achy but basal to tackle long-standing issues for illustration precocious costs and sluggish decision-making.

“Intel has recognized nan request to go much agile,” says Kanisha Chauhan, elder main expert astatine Gartner. “These unit reductions look to beryllium much than conscionable cost-cutting—they’re aimed astatine realigning nan institution pinch that goal.”

Faisal Kawoosa, co-founder of Techarc, agrees: “Intel is trying to reorient itself pinch nan IDM 2.0 strategy — to double down connected halfway strengths and go nan world’s No. 2 foundry subordinate by 2030.”

These cuts are achy but basal if Intel is to realign for nan future, according to Deepak Gupta, Semiconductor & EDA Expert. Still, nan way won’t beryllium easy.

“While activity wants to activity much intimately pinch engineers to trim delays and spark momentum, these changes besides bring uncertainty and worry among employees, which tin stifle innovation,” Gartner’s Chauhan said, highlighting nan risks that travel pinch specified large-scale restructuring.

The way up for a mislaid icon

Looking beyond costs cuts, Intel’s adjacent section will dangle connected really efficaciously it tin sharpen its attraction and clasp disruption. According to Techarc’s Kawoosa, nan institution must boost ratio successful its halfway spot — laptop processors — while exploring high-growth areas for illustration connected cars and maintaining momentum successful nan server market. “Somehow nan invention instrumentality has stalled,” he noted, adding that Intel mightiness use from an inorganic push, perchance done strategical acquisitions of promising startups.

According to Gupta, nan layoffs bespeak “deeper strategical gaps” that person widened complete nan years, peculiarly successful AI and precocious manufacturing.

Gartner remains cautiously optimistic. While Intel still lags successful nan AI race, Gartner’s Chauhan said Intel’s renewed priorities could commencement base consequence successful nan coming years if it stays nan course.

The push to go nan world’s second-largest foundry by 2030 is cardinal to Intel’s IDM 2.0 strategy. The layoffs, though painful, are portion of this reset. “If Intel sticks to its five-year plan,” Kawoosa said, “the results will commencement to show.”

Intel is rewriting its playbook — moving distant from a sprawling, do-it-all exemplary to a sharper attraction connected what it does best: spot fabrication. By shedding bequest functions and narrowing its scope, nan institution is betting connected agility and specialization. “It’s a large shift,” Kawoosa said, “but possibly it’s precisely what Intel needs to enactment relevant—and moreover thrive—in a early shaped by AI.”