Lip-BU TAN, the novel General Director of Intel, sent a blunt message to employees that the company must reorganize to be more proficient. He said that he would reduce employees, but he did not announce the exact number of dismissals as expected.
Bloomberg announced that he was supposed to be preparing for dismissal 20% of his employeeswho at the end of 2024 was about 108,900 people. By 20% would be reduced to about 21,780 lost jobs. And although the announced TAN changes today may cause significant reductions of jobs that will start in the second quarter, did not convert the expected numbers.
So letter to employees coincided with the issue of quarterly numbers 2025. In the case of earnings, Tan said: “It was a step in the right direction because we delivered revenues, gross margin and EPS (profit per share) above our tips, directed by [former interim co-CEOs Dave Zinsner and Michelle Johnston’s] leadership. I want to thank them both and everyone for good performance. “
He quickly warned: “We must rely on this progress-and it will not be easy. We move on an increasingly unstable and uncertain macroeconomic environment, which is reflected in our perspective Q2. In addition, there are many areas in which we must improve. We must confront our challenges, and take quick action to come back to each other.”
“There is no way that these critical changes will reduce the size of our workforce. As I said, when I joined, we must make very difficult decisions to put our company for the future. This will start in Q2 and we will move as soon as possible as possible in the next few months.”
In his list, Tan said that Intel had not set any purpose of reduction of employment.
“We set a new goal of non-GAAP operating costs to around $ 17 billion in 2025, compared to our previously established target $ 17.5 billion and $ 16 billion in 2026,” he said. “There is no way that these critical changes will reduce the size of our workforce. As I said, when I joined, we must make very difficult decisions to put our company for the future. It will start in the first quarter and we will move as quickly as possible as possible in the next few months.”
Tan’s view on Intel culture
Tan inherited a arduous situation because Intel lost on the artificial intelligence market to Nvidia and on the X86 processor market to advanced micro devices. He did not share words about criticizing Intel’s culture as a immense company.
“As I said, it begins with the renewal of our culture. The feedback that I received from our clients, and many of you were consistent. We are perceived as too slow, too complex and too set in our ways – and we must change,” he wrote.
He said that “the flat structure of the executive team (ET), which I divided last week, was the first step.” He said that the next step is to raise simplicity, speed and cooperation throughout the company. And so it has the upcoming changes. Among them: rewriting the company’s AI strategy, said Tan in a call for an analyst. He also said that Intel’s financial results are not where it must be and that Intel will reduce his capital expenditure.
He also said that Intel would not turn Intel Capital and not invest in external companies. Intel sells 51% of its Alter Logical Division to Silver Lake Partners. Alterra has a value of $ 9 billion, so the contract will generate significant cash for Intel.
“We have to go back to our roots and strengthen the position of our engineers. That’s why I raised our basic engineering functions to et et. And many changes that we will conduct are aimed at increasing the productivity of engineers by removing burdensome work flows and processes slowing down the rate of innovation,” said Tan.
He said that in order to make necessary investments in engineering and technological talents, Intel must find novel ways to reduce costs.
“While we took significant actions last year, our current cost structure is still much above competitive reference points. Bearing in mind, we reduced our goals of operating expenses and capital expenditure, which I will discuss when calling our investor this afternoon,” he said.
“When we focus on engineering, we also remove organizational complexity. Many teams have eight or more deep layers, which causes unnecessary bureaucracy that slows us down. I asked ET for a fresh look at their appropriate orgates, with an emphasis on removing layers, increasing the stone of control and strengthening the best results. Our competitors are slim and we need – become improvement to become our execution. ” he said.
As a long -time chip engineer, it is not a surprise that Tan focuses on strengthening engineers to make more. He wrote: “I was surprised when I found out that in recent years the most essential mocking for many managers in Intel was the size of their teams. Going further, it will not be like that.
He said that the company would allow smaller teams to move faster, make better decisions and reduce the number of layers on the road. He said Intel would balance the reduction in relation to the need to preserve and recruit key talents. He said that the team would inform.
Removal of processes
Tan said that his eyes opened to see how much time and energy he was spent on internal administrative work that does not develop a company.
“We must radically simplify this to maximize the time spent on our clients,” he said.
“I instruct our leaders to eliminate unnecessary meetings and significantly reduce the number of meeting participants. Too much valuable time is wasted. We will also modernize processes with an emphasis on live desktops and better data to ensure that we have real-time observations that we need to make better and faster decisions,” he
One of the things he does optionally are the traditions of the formal observations of Intel and the requirements of the District. He believes that he will remain responsible and absorbing feedback can be made in a simpler and more versatile way.
He said that the company would return to work in the office four days a week, instead of the current three days a week on site. The plan of the four -day office will enter into force on September 1, 2025.
He said: “I realize that this is a lot to accept, but we play from behind and we have to gather as a team to put ourselves in the best possible position to win.”
This is quite a arduous medicine and, like the arduous policies that the former long -time General Director of Intel, Andy Grove would do.
I am talking about the possibilities of a fundamental discovery of the industry icon. Become a return that will be examined in business schools for the upcoming generations. To create novel technologies and implement them on a scale to change the world for the better.
“Intel was once widely seen as the most innovative company in the world. There is no reason why we cannot go back there, as long as we drive the changes needed to improve,” wrote Tan. “It will be difficult. This will require painful decisions. But we will make them know what to do to better serve our clients when we build a new Intel for the future – and I have great confidence in the strength of our team and our people to make it happen.”
Finally, he thanked the employees “for everything you did in Q1”. In an analytical conversation he noticed that he had joined five weeks ago. He replaced short-lived bosses, as well as the former general director of Pat Gelsinger, who resigned in December 2024.
Tan said that his motto was promising and excessive delivery, and does not rest until Intel regains his clients’ confidence. Intel said that the tariffs will certainly affect his activities, partly due to the caution he would generate among customers.