Intel Corporation, the largest semiconductor employer in the U.S., recently announced layoffs for over 21,000 workers. This decision is only the latest step in a broader push to reorganize its business model. In August 2024, after previously trumpeting plans for the first U.S. They just announced plans to cut out 15,000 jobs. This latest move is the first big tactical change in the CEO Lip Bu Tan era. He’s driving a more dynamic, accountable, and efficient management structure, along with an engineering culture that encourages innovation and risk-taking.
Intel, for example, had a workforce of around 108,900 at the close of last year. Given the intent to improve operational efficiency, the announcement of these layoffs can be seen as a huge cut to their workforce. Tan transitioned to the role of CEO in late 2024. He’s been on fire to sell his vision for the new company. His philosophy is revolving divisions off into “non-core” subsidiaries and refocusing on what’s core within the overall company.
This past week Intel took a similar step to refocus on its core business by selling 51% of its Altera semiconductor business. The digital infrastructure-focused private equity firm Silver Lake bought this stake. This divestiture is in line with Tan’s vision for the Portland-based company which includes focusing on engineering excellence and innovation. Tan is marshaling resources and eliminating administrative costs. This step will shape a more nimble and lean organization, allowing the company to more quickly pivot with the market and customer needs.
These upcoming layoffs, while painful to those affected, represent Intel’s long term commitment to ousting inefficiency from the company. This effort is intended to help decrease redundancies and shift resources away from more low-impact development toward higher-impact development that fosters growth and technological innovation. In the midst of increasing competition from the likes of China and South Korea, the company has come under immense pressure in recent years. This stress has forced a long-overdue reexamination of its organizational formula.
Intel’s move to lay off employees will hit multiple departments around the company hardest. Workers have raised alarm over the fate of their jobs and the future impact of such shifts on their profession. Yet despite the company’s management repeatedly reassuring stakeholders about the need for these layoffs, there is no actual evidence of this need. They think this strategy is what’s going to position Intel to succeed in the dynamic, rapidly evolving technology industry.
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