Intel
LONDON, UNITED KINGDOM - NOVEMBER 14: The Intel logo is seen outside a pop-up store on Oxford Street on November 14, 2024 in London, United Kingdom. Leon Neal/Getty Images

Intel is reportedly planning to lay off over 21,000 employees, which is about 20% of its workforce.

The news comes just before Intel's first-quarter earnings call, led by new CEO Lip-Bu Tan, who took over from Pat Gelsinger last year.

Tan's restructuring plan

The layoffs are part of Tan's plan to simplify management and focus on rebuilding a strong engineering culture, according to Bloomberg. At the end of last year, Intel had about 108,900 employees after already cutting 15,000 jobs in August 2024.

The 65-year-old CEO is working to revive Intel after years of losing ground to competitors. The company, based in California's Santa Clara, has been struggling to compete with Nvidia in artificial intelligence computing, which has led to three years of declining sales and financial losses.

Tan, who has experience from Cadence Design Systems, plans to sell parts of Intel that don't fit its main goals and focus on developing stronger products.

Intel's asset sale and Q1 results

Recently, Intel agreed to sell a majority stake in its programmable chips unit, Altera, to Silver Lake Management as part of this strategy. Tan also emphasized the need to rebuild Intel's engineering team, improve its financial health, and better align manufacturing with customer needs.

Intel is set to announce its first-quarter results Thursday, giving the CEO a chance to share more about his plans. While Wall Street expects the company's revenue decline to slow, analysts do not predict a return to previous sales levels for several years, if at all.

Leadership change and factory expansion

Tan was hired after Gelsinger was removed last year. Gelsinger had tried to turn Intel around by expanding its factory network and making it a customized chip manufacturer, but those efforts faced challenges.

Intel has delayed much of its factory expansion, including a major project in Ohio that was expected to be the largest chip production site. The company also expected to benefit from funding under the 2022 Chips and Science Act, but that program's future was uncertain under President Donald Trump.

Plans for a manufacturing partnership with Taiwan Semiconductor Manufacturing Co. (TSMC) have also become unlikely, as the company's CEO recently stated the company will focus on its own business.

Originally published on IBTimes