New CEO Lip-Bu Tan slashes 20% of workforce, reshapes leadership, and doubles down on AI and manufacturing
Once an undisputed leader of semiconductor manufacturing, Intel Corporation is going through a major transformation under Lip-Bu Tan, the new chief executive officer at Intel. Tan was appointed in March 2025, and he finds himself in an uphill struggle trying to rebuild a company whose past supremacy has been eclipsed by the likes of Taiwan Semiconductor Manufacturing Company (TSMC), AMD, and Nvidia.
A Leadership Transformation
With the appointment of Tan, a new chapter opens at Intel. He is well-versed in the semiconductor industry, having been the CEO of Cadence Design Systems and previously serving on Intel’s Board. Tan’s leadership is to streamline operations and build an engineering culture.
One of Tan’s first big moves is going to be the large-scale reduction of their workforce, which is expected to cut over 20% of Intel’s global workforce, approximately 21,000 jobs. This is focused on getting rid of bureaucratic layers so timely decision-making can be expedited. By flattening the hierarchy, Tan is enabling technical leadership towards being more innovative.
Refocusing on Core Competencies
Under his leadership, Intel is reassessing its core focus closer toward chip manufacturing and artificial intelligence (AI). The company has struggled in these areas and lost considerable market share to competitors. Tan has appointed Sachin Katti, previously head of networking chips, to the position of “Chief Technology and AI Officer” in charge of Intel’s AI strategy, product roadmap, and research efforts.
Furthermore, there is consideration for whether Intel should separate chip manufacturing and design. This strategic decision is to provide enhanced efficiencies and focus within each entity, allowing agiler responses to market demand.
Financial Performance and Market Standing
Considering financial performance, Intel has been under scrutiny, having registered its fourth consecutive quarterly revenue decline. For the first quarter of 2025, a 3.4% drop in revenue is expected while losses will be about $945 million, an almost 100% increase from last year. These numbers highlight the urgency with which Tan must act.
In the very face of these challenges, a bullish rally on Intel shares emerged after the announcement of workforce cuts, indicating investor confidence in the new direction of the company.
Geopolitics
On the geopolitical side, trade wars between the United States and China continue influencing Intel’s operations. China contributed nearly a third of Intel’s revenue in 2024, and, in retaliation, the Chinese government threatened large tariffs on chips produced in the U.S. In response, Intel would be examining other ways to counter these moves by exploring possibilities such as manufacturing outside the United States with its plants like the one in Ireland.
Looking Ahead
Intel’s path forward under Tan’s leadership involves a comprehensive overhaul of its operations, culture, and strategic focus. By streamlining its organizational structure, refocusing on core competencies, and navigating complex geopolitical landscapes, Intel aims to reclaim its position as a leader in the semiconductor industry.
The success of these initiatives will depend on effective execution and the company’s ability to adapt to rapidly evolving market dynamics. As Intel embarks on this transformative journey, the industry will closely watch its progress and the impact of Tan’s leadership.
