Intel Begins Major Layoffs as Lip‑Bu Tan Drives Aggressive Restructuring

Intel has kicked off a significant restructuring process under the leadership of its new CEO, Lip‑Bu Tan, marking one of the most aggressive overhauls in the company’s recent history. As part of this move, Intel has begun laying off employees in its Santa Clara, California headquarters, with the first batch of 107 job cuts scheduled to take effect on July 15. The affected roles include key engineering and leadership positions such as physical design engineers, system-on-chip specialists, cloud software architects, and senior IT executives. The layoffs come with severance packages, offering impacted employees either a 60-day notice or a combination of notice period and additional pay with benefits. However, this is only the beginning. Intel plans to reduce 15 to 20 percent of its global manufacturing and factory workforce, a move that will affect thousands of employees worldwide. The company is targeting approximately US $500 million in savings this year, with an additional $1 billion in cost reductions anticipated for 2026.

As part of its restructuring, Intel is also shutting down its automotive-chip business in Munich, a decision that will eliminate most jobs within that division. The company is redirecting its focus toward core areas like CPUs and data center technologies, signaling a retreat from certain non-essential business units. Another significant change includes Intel’s plan to outsource portions of its marketing operations to global consulting firm Accenture. This decision is expected to reduce internal headcount while leveraging AI-driven tools and external expertise to streamline campaign management and customer engagement.

In an internal memo to employees, Lip‑Bu Tan highlighted the urgency of the situation, stating that Intel must become leaner, faster, and more efficient to remain competitive in the semiconductor industry. He criticized the company’s previous culture of equating growth with increasing management layers, advocating instead for smaller, more agile teams that can deliver results without unnecessary bureaucracy. Tan’s leadership marks a clear shift in strategy, prioritizing operational efficiency, core product development, and a simplified organizational structure.

For the technology sector, these developments reflect broader industry trends. Semiconductor companies are under immense pressure to reduce costs, optimize operations, and concentrate on their most competitive product lines. Intel’s restructuring is expected to have ripple effects across its supply chain, workforce dynamics, and industry partnerships. While the job cuts may temporarily disrupt certain projects, the long-term aim is to refocus Intel’s resources on high-growth areas such as AI, data centers, and advanced chip manufacturing.