Remodeling at Intel CEO Lip-Bu Tan Confirms Aannounced Strategy of Streamlining

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Intel Deutschland GmbH

Wuxi InfiMotion Technology Co., Ltd.

Intel's new CEO is getting serious: just last week, reports of mass redundancies at Intel were making the rounds. Lip-Bu Tan has now indirectly confirmed this by announcing flatter hierarchies and a stricter working model.

Despite quarterly sales of 12.7 billion US dollars, which exceeded expectations, the pressure remains high. Intel recorded a loss of 400 million US dollars in the first quarter. The markets reacted skeptically: the shares lost more than seven percent after the presentation of the forecasts for the second quarter. In a message to the workforce, Lip-Bu Tan has now reaffirmed his course of streamlining middle management, which he had already called for as a member of the Supervisory Board.

Reduce hierarchies, speed up decisions

At the heart of the planned changes is a simplification of the company structure. According to Tan, many teams are currently organized over eight or more hierarchical levels - a complexity that hinders quick decisions. In future, the structure is to become flatter and decision-making faster. This also includes cutting jobs: Internal sources report that up to 22,000 employees are affected, around a fifth of the total workforce.

"I was surprised to learn that in recent years, the most important KPI for many managers at Intel was the size of their teams. In the future, this will no longer be the case. I firmly believe in the philosophy that the best managers achieve the best with the fewest employees," Tan explains in his statement.

He does not want to do things by halves: instead of relying on the largest possible teams, as was usual in the previous corporate culture, performance and efficiency should count in future. The CEO encourages employees to take responsibility and drive forward solutions independently. Superfluous meetings and tedious coordination should be a thing of the past.

Technical excellence should once again take center stage

In addition to the organizational streamlining, Tan emphasizes technical expertise as a key element of the realignment. Intel should return to its roots as a technology leader. To this end, the company wants to strengthen its engineering departments and reduce the administrative hurdles described above. Investments in research, development and personnel are to take priority. To create this leeway, Tan announced cost-cutting measures in other operating and investment expenditure.

The working model will also be streamlined: from September 1, 2025, hybrid employees will come to the office four days a week instead of the previous three. The aim is to intensify collaboration and strengthen the corporate culture.

Future uncertain, but course clear

Tan made it clear that the path would not be an easy one. Nevertheless, the realignment is necessary to bring Intel back to the top of the industry. In view of the challenges - from growing competitive pressure to massive investments in new production technologies - it will be crucial whether the new course is accepted by employees and the markets.

A further signal of strategic change: Tan recently met the CEO of contract manufacturer TSMC to sound out possible collaborations. This could allow Intel to significantly intensify its previously rather hesitant approach to partnerships in chip production. The coming months will show whether Intel can actually lay the foundations for a successful future with this comprehensive restructuring. (mc)