Friday, April 25th 2025
Intel's Lip-Bu Tan Outlines "Path Forward" Plan - CEO Announces Reduction of Workforce
Team, (yesterday) we reported our Q1 2025 results. It was a step in the right direction as we delivered revenue, gross margin and EPS (earnings per share) above our guidance, driven by Dave and Michelle's leadership. I want to thank them both, and all of you, for the good execution. We need to build on this progress—and it won't be easy. We are navigating an increasingly volatile and uncertain macroeconomic environment, which is reflected in our Q2 outlook. On top of that, there are many areas where we must improve. We need to confront our challenges head-on and take swift actions to get back on track. As I have said, this starts by revamping our culture. The feedback I have received from our customers and many of you has been consistent. We are seen as too slow, too complex and too set in our ways—and we need to change. Our flatter Executive Team (ET) structure that I shared last week was a first step. The next step is to drive greater simplicity, speed and collaboration across the entire company. To achieve these objectives, today I am announcing some important changes.
Becoming an Engineering-Focused Company
We need to get back to our roots and empower our engineers. That's why I elevated our core engineering functions to the ET. And many of the changes we will be driving are designed to make engineers more productive by removing burdensome workflows and processes that slow down the pace of innovation. To make necessary investments in our engineering talent and technology roadmaps, we need to find new ways to reduce our costs. While we have taken significant actions in the last year, our current cost structure is still well above competitive benchmarks. With that in mind, we have reduced our operating expense and capital spending targets going forward, which I will discuss during our investor call this afternoon.
Flattening the Organization
As we refocus on engineering, we will also remove organizational complexity. Many teams are eight or more layers deep, which creates unnecessary bureaucracy that slows us down. I have asked the ET to take a fresh look at their respective orgs, with a focus on removing layers, increasing spans of control and empowering top performers. Our competitors are lean, fast and agile—and that's what we must become to improve our execution. I've been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams. Going forward, this will not be the case. I'm a big believer in the philosophy that the best leaders get the most done with the fewest people. We will embrace this mindset across the company, which will include empowering our top talent to make decisions and take greater ownership of key priorities.
There is no way around the fact that these critical changes will reduce the size of our workforce. As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2, and we will move as quickly as possible over the next several months. We are going to be very intentional about where we focus these efforts and how we stack up against the best in the industry. We have learned some valuable lessons from past actions. We must balance our reductions with the need to retain and recruit key talent. I will empower each of my leaders to make the best possible decisions aligned with our top priorities. These decisions will not be made lightly, and we will keep you regularly informed.
Streamlining Our Processes
It has been eye-opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward. We need to radically simplify this to maximize the time spent focusing on our customers. I am instructing our leaders to eliminate unnecessary meetings and significantly reduce the number of meeting attendees. Too much valuable time is being wasted. We will also modernize processes with a focus on live dashboards and better data to ensure we have the real-time insights we need to make better and faster decisions.
In addition, I have decided to make our formal Insights and OKR requirements optional. While it's crucial for us to stay accountable for our results and receive feedback on our performance, I believe we can achieve this in a simpler and more flexible way. Along the same lines, we will cut back on time-consuming corporate administrative tasks such as non-essential training and documentation.
Returning to the Office
Our existing policy is that our hybrid employees should spend approximately three days per week on site. Adherence to this policy has been uneven at best. I strongly believe that our sites need to be vibrant hubs of collaboration that reflect our culture in action. When we spend time together in person, it fosters more engaging and productive discussion and debate. It drives better and faster decision-making. And it strengthens our connection with colleagues.
With that in mind, we will be updating our policy to require four days per week on site by Sept. 1. I wanted to tell you well in advance so that you have time to make any adjustments to your daily routines. We are going to work hard in the meantime to ensure sites are ready to operate at full capacity. Your local leadership will share site-specific details and seek your input on how to create the best possible on-site experience.
Building a New Intel
I realize this is a lot to take in, but we are playing from behind, and we need to rally as a team to put ourselves in the best possible position to win. This requires us to be laser-focused on developing the best products. We need to delight our customers and earn their trust by delivering the performance, quality and reliability they need to succeed. We must demonstrate predictable execution and ensure on-time delivery. And we need to deliver consistent returns for our shareholders.
There are two ways teams can respond at make-or-break moments like this: They can look at the gap they need to close and give up—or they can look inside themselves and fight like never before. I made my choice last month when I decided to join you all, and there is no place I would rather be right now. I came on board knowing full well this would be the most challenging job of my career, but also the most motivating and fulfilling—because we have opportunities ahead that most people don't get in their careers.
I'm talking about the opportunity to fundamentally reinvent an industry icon. To pull off a comeback that will be studied in business schools for generations to come. To create new technologies and deploy them at scale to change the world for the better.
Intel was once widely seen as the world's most innovative company. There's no reason we can't get back there, so long as we drive the changes needed to improve. It's going to be hard. It will require painful decisions. But we will make them knowing it's what we must do to serve our customers better as we build a new Intel for the future - and I have great confidence in the power of our team and our people to make it happen.
Thank you for everything you did in Q1. I look forward to talking more tomorrow during our All Company Meeting.
Forward-Looking Statements
This letter includes forward-looking statements, including with respect to our future business plans, strategies, objectives and expectations. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied, including the risks and uncertainties described in Intel's 2024 Form 10-K, Q1 2025 Form 10-Q and other filings with the SEC. All information in this statement reflects management's intentions and expectations as of the date of this statement, unless an earlier date is specified. We do not undertake, and expressly disclaim any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.
Source:
Intel News
Becoming an Engineering-Focused Company
We need to get back to our roots and empower our engineers. That's why I elevated our core engineering functions to the ET. And many of the changes we will be driving are designed to make engineers more productive by removing burdensome workflows and processes that slow down the pace of innovation. To make necessary investments in our engineering talent and technology roadmaps, we need to find new ways to reduce our costs. While we have taken significant actions in the last year, our current cost structure is still well above competitive benchmarks. With that in mind, we have reduced our operating expense and capital spending targets going forward, which I will discuss during our investor call this afternoon.
As we refocus on engineering, we will also remove organizational complexity. Many teams are eight or more layers deep, which creates unnecessary bureaucracy that slows us down. I have asked the ET to take a fresh look at their respective orgs, with a focus on removing layers, increasing spans of control and empowering top performers. Our competitors are lean, fast and agile—and that's what we must become to improve our execution. I've been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams. Going forward, this will not be the case. I'm a big believer in the philosophy that the best leaders get the most done with the fewest people. We will embrace this mindset across the company, which will include empowering our top talent to make decisions and take greater ownership of key priorities.
There is no way around the fact that these critical changes will reduce the size of our workforce. As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2, and we will move as quickly as possible over the next several months. We are going to be very intentional about where we focus these efforts and how we stack up against the best in the industry. We have learned some valuable lessons from past actions. We must balance our reductions with the need to retain and recruit key talent. I will empower each of my leaders to make the best possible decisions aligned with our top priorities. These decisions will not be made lightly, and we will keep you regularly informed.
Streamlining Our Processes
It has been eye-opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward. We need to radically simplify this to maximize the time spent focusing on our customers. I am instructing our leaders to eliminate unnecessary meetings and significantly reduce the number of meeting attendees. Too much valuable time is being wasted. We will also modernize processes with a focus on live dashboards and better data to ensure we have the real-time insights we need to make better and faster decisions.
In addition, I have decided to make our formal Insights and OKR requirements optional. While it's crucial for us to stay accountable for our results and receive feedback on our performance, I believe we can achieve this in a simpler and more flexible way. Along the same lines, we will cut back on time-consuming corporate administrative tasks such as non-essential training and documentation.
Returning to the Office
Our existing policy is that our hybrid employees should spend approximately three days per week on site. Adherence to this policy has been uneven at best. I strongly believe that our sites need to be vibrant hubs of collaboration that reflect our culture in action. When we spend time together in person, it fosters more engaging and productive discussion and debate. It drives better and faster decision-making. And it strengthens our connection with colleagues.
With that in mind, we will be updating our policy to require four days per week on site by Sept. 1. I wanted to tell you well in advance so that you have time to make any adjustments to your daily routines. We are going to work hard in the meantime to ensure sites are ready to operate at full capacity. Your local leadership will share site-specific details and seek your input on how to create the best possible on-site experience.
Building a New Intel
I realize this is a lot to take in, but we are playing from behind, and we need to rally as a team to put ourselves in the best possible position to win. This requires us to be laser-focused on developing the best products. We need to delight our customers and earn their trust by delivering the performance, quality and reliability they need to succeed. We must demonstrate predictable execution and ensure on-time delivery. And we need to deliver consistent returns for our shareholders.
There are two ways teams can respond at make-or-break moments like this: They can look at the gap they need to close and give up—or they can look inside themselves and fight like never before. I made my choice last month when I decided to join you all, and there is no place I would rather be right now. I came on board knowing full well this would be the most challenging job of my career, but also the most motivating and fulfilling—because we have opportunities ahead that most people don't get in their careers.
I'm talking about the opportunity to fundamentally reinvent an industry icon. To pull off a comeback that will be studied in business schools for generations to come. To create new technologies and deploy them at scale to change the world for the better.
Intel was once widely seen as the world's most innovative company. There's no reason we can't get back there, so long as we drive the changes needed to improve. It's going to be hard. It will require painful decisions. But we will make them knowing it's what we must do to serve our customers better as we build a new Intel for the future - and I have great confidence in the power of our team and our people to make it happen.
Thank you for everything you did in Q1. I look forward to talking more tomorrow during our All Company Meeting.
- Lip-Bu Tan
Forward-Looking Statements
This letter includes forward-looking statements, including with respect to our future business plans, strategies, objectives and expectations. These statements involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied, including the risks and uncertainties described in Intel's 2024 Form 10-K, Q1 2025 Form 10-Q and other filings with the SEC. All information in this statement reflects management's intentions and expectations as of the date of this statement, unless an earlier date is specified. We do not undertake, and expressly disclaim any duty, to update such statements, whether as a result of new information, new developments, or otherwise, except to the extent that disclosure may be required by law.
53 Comments on Intel's Lip-Bu Tan Outlines "Path Forward" Plan - CEO Announces Reduction of Workforce
Our existing policy is that our hybrid employees should spend approximately three days per week on site. Adherence to this policy has been uneven at best. I strongly believe that our sites need to be vibrant hubs of collaboration that reflect our culture in action. When we spend time together in person, it fosters more engaging and productive discussion and debate. It drives better and faster decision-making. And it strengthens our connection with colleagues.
With that in mind, we will be updating our policy to require four days per week on site by Sept. 1. I wanted to tell you well in advance so that you have time to make any adjustments to your daily routines. We are going to work hard in the meantime to ensure sites are ready to operate at full capacity. Your local leadership will share site-specific details and seek your input on how to create the best possible on-site experience."
and like that I have zero respect or Mr Tan, good luck Intel, you will need it.
I've heard this crap soooooooo many times before, and in the end, it rarely ever works they way they say it will, because instead of keeping veteran employees (at their current pay rates) who know what they are doing and can keep things moving along, somewhere down the road, they will have to replace at least some of them with new, younger, less capable tweener-bots/recent grads who know NUTHIN, but will expect to earn the current, higher pay rates in effect at that time and will require significant investments in training time, which is a self-defeating premise that only serves to bring down not only morale, but also productivity, profits and solidarity within the ranks....
Sorry, rant over, I now return you to regularly scheduled forum banter & discussions :D
Crying and bitching about it is weak imo
But Intel is increasing office time to 4 days per week because they can't enforce 3 days per week. I'm stupid enough to not understand that, or maybe I mixed up cause and effect.
I see a lot of these comments griping about work from home, when for some, it works well, and it also benefits the company. A lot of these comments come from a lack of understanding about how modern business works. Office environments can also be shitty, toxic places. Also, in a global space, having engineering troubleshooting meetings with people across huge distances doesn't require you to travel to an office.
Me? I worked in a face to face environment, so I never had a choice. But for other businesses - work from home works as well, sometimes better. It's a lazy slur to say all work from home folks are butt hurt.
"Crying and bitching about it is weak imo" like how can you not see that this is SUCH a bad take? such an anti amployee statement.
No doing whatever the boss wants you to do, because in their mind it makes them more money, without a blink...that...now that is a showing of strength.......
Idk how eduction goes in your country, but here, students learn to work together and learn when its needed to actually get together physically and when that is not needed.
Anyone working at intel who knows their job requires them to come in will do so....and anyone who can do their tasks perfectly at home will do so.
Again this is just CEO's feeling the need to kick down, keep the worker bees working instead of treating/respecting them like the valued adults they are.
Wonder if the top layer will come in 8 to 5 4days a week as well....oh no wait, it probably does not actually count for them.....
This was the main sentiment by everyone I worked with at the last company when we were hybrid. They ended up working too much at home, couldn't keep home vs work seperate. But going to in office full time again the grief there was coming from a place of laziness and convenience. No one minds coming in full time now. And we still get some freedom to WFH if we want/need to occasionally.
Also fwiw, I do think WFH can absolutely work. I've done both. I never said anything about it being worthless, not working. If it didn't work, VLSI industry would have been absolutely f*** since 2020. But I also value coming into the office and doing engineering with others face to face so much more than trying to do it over zoom calls. It's way nicer to pop over to neighbors cube, and draft stuff on white boards etc. Especially for newer engineers, WFH can be horrible for them. Meetings with teams, etc. Are so much better in person as well.No one is holding a gun to their head that they have to work there. If they don't like the changes (one more day in the office) they can leave. That's the real show of strength.
And I'll let you know, most companies within VLSI are slowly rolling back WFH and hybrid across the industry. This is not unique to Intel right now. Hell the company I'm at now never had WFH even during COVID.
There are two common situations I see that result in statements like the one you're replying to:
1. I see that come from people with hands-on jobs that can't be done remotely (machinist, assembler, maintenance, etc.) and they see the "carpeteers" or office folk work from home and they get mad at the uneven benefit.
2. Not everyone is capable (or willing) to actually put in the same effort if they're at their "home office" aka living-room/bedroom or whatever at home and when you have colleagues that are "WFH" but end up barely, if at all, reachable on the days they're not in the office, it makes the people in the office believe that it just can't happen and those people are taking advantage of the benefit while not doing any work those days.
I think any modern business that has engineers and office staff is going to consider WFH-policies and there's competition over those benefits across the industry now. Where I think those companies will succeed or not is how they enforce or check on those staff working from home to see if they're being productive in those moments. Some people are considerably more productive away from the office because they aren't being bothered every 3 minutes so they're allowed to focus on the task(s) and power through their work. Other people turn on the TV or something and forget they have work to do.
It's a tricky task and I'm extremely anti-nag/nanny when it comes to micro-managing staff (at home or otherwise), but I think it's fair for those companies to have some sort of productivity and reachability standards for their staff that's WFH.
Personally, I'm of the opinion that you hire people capable of doing their jobs and then you let them do their jobs...with encouragement on successes (I believe the old adage is "give them enough rope..."). If you don't have the right people or people capable of doing the job (at home or not), it'll become apparent eventually and you find new people who are capable.
Sorry, this was a whole lot of writing to say "I agree with what you said" lol.
On the topic of Intel, to say it's about "control" is quite ridiculous. Just think about it from a business perspective. If WFH is just as, or more productive than, on site work, then why would they touch it? All things being equal, it's cheaper to let an employee work from home--you don't need to supply them with anything, you don't need as much office space, they don't consume any resources. Heck, if they fall and hurt themselves, they didn't do it in your building. No, they likely have years of telemetry and employee reviews to see that they are no longer getting what they are paying for out of more and more people every year. Sure, there are those that work from home productively, but that's a tough balance that I doubt most can handle. Intel has been declining for years, so if you worked there, you should expect some drastic measures--you should hope for drastic measures, because if leadership doesn't right the ship, YOU might be in the next round of layoffs.
Almost all addicts are self-medicating for ailments that they either have no treatment for, or no access to treatment for, and "boredom" isn't one of them, at least not for addiction, perhaps for sporadic, recreational use, but not addiction. (BTW, out of the literally hundreds of millions of people who will use recreational drugs at some point in their life, only approximately 1%-4% of them will ever deal with issues of "addiction")
I have to agree this wall of text is like Deja vu from other "new" CEOs. The "we got to do better" campaign is the same shit with a different colored kool-aid in your glass. The threat of layoffs and firings should start with the over paid management, upper management is always biggest burden.
People who like WFH will defend it with "reports" that productivity is at an all time high, yet the quality of product designed over the WFH saga has been extremely disappointing across all sectors, to put it mildly.I see a lot of people abusing it, and others doing great work. As always, it comes down to management wrangling their employees correctly, but sadly, without going full 1984 its a lot harder to control employees at home VS at work, and rather then address the problems personally they'd rather punish everyone.
Instilling the belief of "everyone gets punished when one breaks the rules" is one of the worst things the public schools ever instilled in us.
It's important to treat this issue with logic. not all posts require constant office/workspace presence. And not all jobs (manual/front of house, customer facing) can even do one day wfh.
But we all know people can be lazy arseholes wherever they work.
I can do that at home. When I'm working with devices and equipment sure going to the office makes sense, but the days that I'm in meetings all day don't require my presence in the office.
All this new infrastructure was set up so people could do as much of their work remotely, why would we not continue it's use where appropriate.
The best argument I've heard for being in the office, other than working with equipment, is for the new people/new grads. There's a lot of learning and networking that happens in the first couple years at a company.
I've personally had a great amount of spontaneous hallway meetings that resulted in great brainstorming sessions or new contacts/connections. This is something that happens much less in a hybrid/remote model where you have to set up meetings etc.
I say all these things as someone who works in engineering in the semiconductor field. Different industries of course will have different needs.
What companies really need to do is enforce teams to deliver results. How they get there should be within their own autonomy. That's how professionals want to be treated. We are our own boss and always have been, because everyone in their 30-40's right now has already lived a school and work life of 'figure all of your shit out yourself'.
All that Lip Bu Tan will create here is resistance and demotivation... and bad surprises as people create a facade of progress.
We live in a world where online collaboration is perfectly supported by tooling. If you are a real modern company... you make use of those tools and facilitate teams to be able to work wherever they want, so you get happier and more motivated workers. The rest... will just happen automatically because people get to manage their life work balance in true autonomy. The only guidelines are your targets: actual results. Everything else is just a means to that end anyway... why micro manage it?! Everyone simply hears that as 'I don't trust your guts' ... The worst work relationship you can foster.Every organization ever will try to kick down the problems down the line.
The job of the workforce is to escalate them right back up again :)
Managers call this 'challenging ideas'. All I see is a modern approach to slavery, packaged a lot better.You're reasoning from that instilled belief, indeed.
And its not how it works. If you want a motivated workforce, first, you give them everything they ask for. Then, you can ask them to do work for you and they'll happily do it. Honestly, its a simple matter of balance. If my employer is nice to me, I'm going to be nice to them. If my employer is loyal to me, I return that loyalty. Tit for tat. It will never work any other way. And sure, there is going to be a small percentage of people abusing such a relationship. Good managers pick those rotten apples out of the basket and have some serious talks and get those people in line, or out of the company/team. There is also going to be a percentage that simply isn't competent or won't grow. Those, similarly, need adjustment.
Of course this kind of work relationship is not for everyone. But in tech? The overwhelming majority can be managed like that just fine.