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Intel to Slash More Than 20% Workforce Amidst Restructuring

Intel to Slash More Than 20% Workforce Amidst Restructuring

American International corporation and technology company Intel has announced plans to slash more than 20% of its workforce.

The upcoming layoffs according to Bloomberg, is part of CEO Lip-Bu Tan’s broader plan to build an engineering first culture, and restructure its balance sheet, in the light of growing competition from Nvidia and TSMC.

The move follows a challenging period for Intel, which has seen its stock plummet 67% over five years and lost technological ground to rivals like Nvidia in AI computing. The company reported three consecutive years of declining sales and mounting losses. In line with this, last year, the company cut approximately 15,000 jobs, reducing its workforce from 124,800 to 108,900 by year-end.

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This drastic measure was driven by declining revenue, increased competition, and the need to reduce costs. The layoffs impacted various departments, including research and development, sales, and marketing.

Tan, who was appointed as Intel Chief Executive Officer in March 2025, is streamlining operations by having key chip groups report directly to him and rethinking Intel’s AI strategy. The restructuring includes shedding non-core assets, exemplified by last week’s $4.46 billion deal to sell a 51% stake in its Altera programmable chips unit to Silver Lake Management. The deal, which values Altera at $8.75 billion half the $17 billion Intel paid in 2015, provides critical cash after costly investments in contract manufacturing under former CEO Pat Gelsinger.

The layoffs and strategic pivot aim to address Intel’s bloated middle management and regain competitive edge. The announcement follows report of Tan’s efforts to flatten leadership and refocus the company on compelling, innovative products.

According to analysts, changes to Intel’s executive management team by the new CEO, after just over a month on the job, is proof of the sense of urgency in the company to act quickly to compete with rivals Nvidia, AMD, and TSMC. Despite being a dominant player in many markets, Intel is currently facing strong competition and numerous threats to its business.

The company is now trailing behind Nvidia, which is currently dominating the AI market, particularly in high-end training models, meanwhile, Intel has an advantage with AI accelerated CPUs for inference-based AI. Intel’s Habana acquisition also provides a custom AI chip (Gaudi) that competes with Nvidia’s A100 family. Low-end AI embedded accelerators in ARM-based systems may serve the lower end of the market, but Intel is expected to capture a significant share of the overall AI market.

While Intel has produced quality software for years and made significant contributions to industry initiatives, it will have to work hard to be perceived as a competitive enterprise-level software provider. Nevertheless, this area represents a revenue growth area if Intel can be successful.

Intel has been lagging behind in process technology, but is pursuing a “catch up and surpass” strategy by opening its production facilities to outside chip companies. While it has signed high-profile companies, such as MediaTek, it remains to be seen how competitive it can be against TSMC, GlobalFoundries, Samsung, and others.

To sum up, Intel faces several challenges in maintaining or recapturing market share, but it is effectively pushing back in several key areas. While it may take a few years before all of its efforts bear fruit, analysts are optimistic Intel is in a better position now than before.

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