A few individuals will lose their jobs when the business eliminates middle management.
Intel's new CEO Lip-Bu Tan confirmed in a memo to staff that the company is to reorganise in a bid to cut costs and focus on its core competencies. The plans will see a number of jobs lost, but exactly how many is unclear. The world's largest chipmaker had 108,900 workers at the end of last year and could reduce that total by almost 20 percent, Bloomberg reported this week.
In the message, Tan described the reorganisation as an effort to reduce “unnecessary bureaucracy” and complexities and layers of mid-level managers. “I’m a big believer in the philosophy that the best leaders get the most done with the fewest people. We will embrace this mindset across the company, which will include empowering our top talent to make decisions and take greater ownership of key priorities,” Tan wrote. “These significant changes will inevitably result in a reduction in our workforce. As I noted in my very first message to employees, we need to make some difficult decisions in order to position our company for success in the future. This process will begin in Q2 and will be executed as quickly as possible over the course of the next several months,” Tan wrote.
This is not the first time Intel has downsized in recent years. In August 2016, Intel said it would lay off more than 15,000 employees to cut costs. Intel has been struggling with slowing sales — it hasn't moved fast enough to catch up with the industry’s pivot toward artificial intelligence.
AI is also a big focus for future Intel. "My focus will be ensuring that our team builds products that are highly competitive and meet our customer needs as we enter a new era of computing that is defined by AI agents and models," Tan told investors on a call. “To make this happen, we are taking a holistic approach to reshape our portfolio to optimise our products for new and emerging AI workloads. We are making the appropriate adjustments to our product roadmap to ensure that we are delivering best-in-class products while maintaining our execution sharpness and delivering on time.”
Tan is trying to shake things up by making Intel more of an engineering company moving forward. “Many of the changes we will be driving are aimed at making engineers more effective by eliminating unnecessary workflows and processes that hinder the pace of innovation,” he argued. The company is also aiming to “drive cost efficiencies in other areas, so that we can invest in our engineering talent and technology roadmaps.” These include a two-year goal of reducing operating costs by $1.5 billion.
One of the main reasons for these changes is to make the company more efficient. Tan wants managers to eliminate any meetings they can and cut down on the number of people invited to meetings as “too much valuable time is being wasted.” Intel is also expanding its return-to-office mandate by requiring workers to be on site four days a week (up from three) starting in September.
Tan certainly has high hopes for turning Intel around. “I’m talking about the chance to do nothing less than fundamentally reinvent an industry icon. To pull off a comeback that will be a case study in business school for generations. To invent new technologies and bring them to scale to make the world a better place,” he said. “At one time, Intel was universally viewed as the world’s most innovative company. We can get back there — as long as we make the changes to improve.”
