New Intel Chief Lip-Bu Tan ‘Considers’ Job Cuts, Factory Revamp

Incoming Intel chief executive Lip-Bu Tan is considering sharp cuts to the company’s middle-management and changes to its manufacturing processes to improve usability and performance, Reuters reported.

Tan, a former Intel board member who starts as chief executive on Tuesday, is also planning to revamp Intel’s approach to artificial intelligence, the report said, citing unnamed sources.

The incoming chief views Intel’s middle-management as slow-moving and bloated, something that has slowed the company’s decision-making, the report said.

‘Only the paranoid survive’

Tan spent months reviewing Intel’s manufacturing process after the board in late 2023 appointed him to a special role overseeing it, according to a regulatory filing.

In an assessment presented to the board, he reportedly expressed frustration with the company’s culture, saying it had lost the “only the paranoid survive” culture it had under former chief executive Andy Grove from 1987 to 1998.

Tan presented his ideas to the board last year, but the board declined to implement them, leading to Tan’s abrupt resignation from the board last August.

At a town hall meeting following his appointment as chief executive last week, Tan reportedly told employees the company will need to make “tough decisions”.

Intel carried out a wave of 15,000 job cuts in late 2024, resulting in a reported headcount of nearly 109,000 at the end of last year.

Another of Tan’s core priorities is reportedly revamping Intel’s manufacturing operations.

Tan said in a memo published last Wednesday that he plans to keep control of the Intel Foundry plants and restore the company’s position as a “world-class foundry”.

Foundry revamp

He plans to aggressively seek customers for the foundry business, part of this initiative being to make the process easier to use for potential clients such as Nvidia or Google, Reuters’ report said.

Nvidia, Broadcom and AMD are all evaluating Intel’s foundry offerings, according to previous reports.

Tan wants to improve Intel’s yield per wafer as the company brings its 18A process online this year.

He wants to restart the company’s AI server chip plans and eventually move to an annual release of AI chips similar to Nvidia, although that will take years.

The report cited sources as saying it would take Intel until at least 2027 to produce a compelling new AI chip architecture.