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(Reuters) – Intel is preparing to announce substantial layoffs, reportedly affecting over 20% of its workforce, as part of an initiative to streamline its operations and eliminate bureaucratic bottlenecks, according to a Bloomberg News report released on Tuesday, which cited an insider.
These layoffs are part of a comprehensive plan to reorient the company towards a more engineering-focused culture, the report indicated.
Intel has yet to provide a comment in response to inquiries regarding the layoffs.
This decision represents a significant strategy shift implemented by new CEO Lip-Bu Tan, who assumed leadership just last month with the aim of revitalizing the beleaguered chip manufacturer amidst a myriad of operational challenges.
In a previous report, it was highlighted that Tan is contemplating major revisions to the company’s chip manufacturing processes as well as its artificial intelligence strategies.
The evolving strategy includes a restructuring of Intel’s AI offerings and workforce reductions to tackle what Tan has characterized as an overly slow-moving and cumbersome management structure. During a town hall meeting soon after his onboarding, he communicated to employees the necessity of making “difficult choices.”
Recent developments also indicate that Tan is working to streamline the company’s hierarchy by reducing layers of leadership, with significant chip divisions now directly reporting to him.
These forthcoming layoffs follow a considerable workforce reduction announced last August, when Intel revealed plans to cut approximately 15% of its staff, equating to around 15,000 positions.
The anticipated job cuts in 2024 are part of a broader $10 billion cost-saving initiative for the year, driven by escalating expenses, decreasing profit margins in its primary PC and data center divisions, and the costly transition towards AI chip production, an area where Intel is struggling to keep pace with rivals like Nvidia.
As of the end of 2024, Intel’s workforce stood at 108,900 employees, according to a filing.
The company is expected to disclose its first-quarter financial results on Thursday.
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finance.yahoo.com