Intel Corporation has begun a sweeping round of job cuts under CEO Lip-Bu Tan, starting with 107 employees in California, according to a notice filed under the state鈥檚 Worker Adjustment and Retraining Notification (WARN) Act. The layoffs, scheduled to begin on 15 July, are the first public step in what Tan calls a broader strategy to 鈥渂ecome a leaner, faster and more efficient company.鈥漈he Santa Clara-based employees affected include a mix of engineers and senior managers across CPU and GPU development teams. These initial layoffs are part of a wider global wave expected to impact up to 20% of Intel鈥檚 workforce, especially in chip manufacturing.Engineering, management and Foundry teams hitCRN reported that several roles tied to Intel鈥檚 core chip design and production efforts are being eliminated. These include 22 physical design engineers, cloud software developers, and system-on-chip designers. The cuts extend to management ranks, with affected positions including a vice president of IT, engineering project managers, and strategy heads.A spokesperson told CRN, 鈥淎s we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company. Removing organisational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution.鈥漈an, in a company-wide memo from April, had written: 鈥淭here is no way around the fact that these critical changes will reduce the size of our workforce.鈥 He added, 鈥淲e must balance our reductions with the need to retain and recruit key talent.鈥滾ive EventsEmployees have been notified with either a 60-day warning or a four-week notice period, along with nine weeks of pay and benefits. The move is part of Intel鈥檚 plan to reduce operating costs by $500 million in 2025 and an additional $1 billion in 2026.Automotive chip unit shuts down in GermanyBeyond layoffs in the U.S., Intel has confirmed the closure of its automotive chip division in Munich. The unit, headed by Intel veteran Jack Weast, was developing software-defined vehicle platforms. Most employees in the unit are expected to be laid off.In a statement, an Intel spokesperson told CRN: 鈥淭he decision to wind down the automotive business, which resided within the Client Computing Group, is part of a move by Tan to refocus on the company鈥檚 core client and data centre portfolio.鈥漈his division had been seen as one of Intel鈥檚 bets on the future of mobility. But Tan appears to be redirecting Intel鈥檚 efforts back to its more traditional strengths, such as CPUs and data centres, amid rising cost pressures.Marketing operations outsourced to AccentureIn another major shift, Intel will outsource part of its marketing operations to global consulting firm Accenture. The transition will focus on customer communication roles, which will be increasingly handled by artificial intelligence systems.鈥淲e are focused on modernising our digital capabilities to serve our customers better and strengthen our brand,鈥 the company said. 鈥淎ccenture is a longtime partner and trusted leader in these areas, and this engagement will allow Intel and its partners to drive better business outcomes through simpler processes and programmes.鈥漈he outsourcing is part of a wider move to streamline non-core operations, reduce overheads, and bring in external partners for functions no longer deemed strategic.A culture shift in leadershipIn internal communications, Tan has pushed for a cultural reset. He has openly criticised a management style where promotions were linked to the size of a team. 鈥淚鈥檝e been surprised to learn that, in recent years, the most important [key performance indicator] for many managers at Intel has been the size of their teams. Going forward, this will not be the case,鈥 he wrote.鈥淚鈥檓 a big believer in the philosophy that the best leaders get the most done with the fewest people,鈥 Tan added. He says Intel needs small, empowered teams who can take ownership of projects and move quickly without layers of decision-making.Industry layoffs mounting in 2025Intel鈥檚 latest cuts follow a round of 15,000 layoffs in 2024. They come amid a broader wave across the tech sector. According to Layoffs.fyi, more than 62,000 tech workers have already lost jobs in 2025. Major players like Microsoft, Amazon, Meta, and Google have all announced staff reductions this year.The pressure on chipmakers has grown sharply as global demand shifts and competition intensifies. Intel, once the industry鈥檚 uncontested leader, has struggled to maintain its edge in manufacturing and has faced delays in product rollouts.Tan鈥檚 restructuring may be bold, but it is also risky. Much of Intel鈥檚 future now hinges on whether these sweeping changes can actually lead to faster execution, stronger innovation, and restored confidence鈥攂oth inside and outside the company.(You can now subscribe to our Economic Times WhatsApp channel)
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