Intel to announce plans this week to cut more than 20% of staff

[siliconbruh999]

fair enough. He is benchmarking Intel vs other companies and Intel needs big changes to even get close. Rumor is that he thinks correct headcount is 60-70K so this might be just a start. Many will be sell offs, not layoffs though..... be patient

If he is basing this on comparing with TSMC he is doing it wrong he is mixing different work ethics when comparing with TSMC and he knows it what's the current headcount.
I expect more delay for product if they do this much reduction.

Best of all it looks like a circus to me.

 

[blueone]

fair enough. He is benchmarking Intel vs other companies and Intel needs big changes to even get close. Rumor is that he thinks correct headcount is 60-70K so this might be just a start. Many will be sell offs, not layoffs though..... be patient

I agree with the philosophy of the getting headcount down, and so far I haven't seen much logic to it. Perhaps Tan will get rid of 50% of his mostly useless appointed vice presidents. Dump about the same proportion of fellows. Put an end to technical promotion committees, where they mostly count patents and invention disclosures, and break up the conspiracy pools that always ensure each disclosure has the maximum number of names on it, and one is usually a manager. (Intel is far from the only company with this disease.)

The previous voluntary retirement action was a costly way to get rid of thousands of senior engineers without regard to value-added.

I'm so tired of watching Intel management do dumb things, I think I will faint from surprise if I saw any sort of personnel or technology actions I thought make sense.

I would also like to be excited by one announced leadership appointment. Haven't yet, Tan included.

 

[Xebec]

As of the latest cuts:

Revenue per Employee
Intel ~$570,000
Qualcomm ~$870,000
AMD ~$1,200,000
TSMC ~$1,270,000
Nvidia ~$1,420,000
Apple ~$2,400,000

If you remove Intel from the list, AMD and TSMC look pretty inefficient vs Apple.

 

[fansink]

My understanding was that Lip-Bu did not agree with Pat's 15% cut. Lip-Bu wanted deeper cuts. Based on the latest rumors that seems to hold weight. Lip-Bu has said publicly that he supports the manufacturing side of Intel. We will know more at the Intel Foundry event next week.

Consider, Tan is performing as if he's all-in on bringing chips back to America. That's exactly what DC wants, and the ship was already heading in that direction.

Continue to reduce non-essentials (~60%) slowly morphing towards a fabless profile.

18A and its derivative half-node will run at least 3.75 more years.

All the while, as @MKWVentures puts it, continue to make the "best business decisions", which will resemble the Nova Lake decision.

Just another NSWAG

 

[kevin01]

fair enough. He is benchmarking Intel vs other companies and Intel needs big changes to even get close. Rumor is that he thinks correct headcount is 60-70K so this might be just a start. Many will be sell offs, not layoffs though..... be patient

After this layoff, and excluding $mbly and altera, Intel will have roughly 60-70k employees.

 

[dkr1986]

Lip Bu Tan is splitting the DCAI group to Datacenter group & AI group. DC group will only focus on DC CPUs under Karin Eibschitz. AI group will be led by the new CTO, Sachin Katti, will focus on AI accelerators for DC. It looks like NEX & all groups under previous CTO will also be led by Sachin.

As Intel Creates New AI Group, Data Center Division To ‘Refocus’ On CPUs: Memos

With Intel’s new CTO and AI chief taking over responsibilities for the company’s AI road map and strategy, the business unit most recently known as the Data Center and AI Group will “refocus” on CPUs and take on an older name, according to two internal memos seen by CRN.

www.crn.com

Some more changes by Tan per his memo

4 More Changes Intel CEO Lip-Bu Tan Made To His Executive Team

CRN details four previously unreported changes Intel CEO Lip-Bu Tan made to his executive team, which include new responsibilities for CFO David Zinsner and the chief communications officer becoming a direct report.

www.crn.com

 

[tooLongInEDA]

This will result in a RIF of over 40% when combined with the last round of layoffs. IMHO cuts this deep will do more damage to morale than any gains they might make, unless Tan can clearly show they are aimed at reducing management and he is making engineers lives better. The engineering staff already took a serious hit in the last round of layoffs. Many of them their most experience engineers leaving though voluntary severance.

Not remotely close enough to Intel to comment on the effect on morale. But looking from outside, I'm slightly surprised that a US company could make 35-40% staff cuts through only voluntary redundancies. This will doubtless sound a little callous, but part of me is saying that we'll know Intel is really getting serious here when they get beyond voluntary redundancies - that this sends out a message that there are no more easy or soft options and it really is about survival. Which it may well be for parts of Intel now. And that's not something I see as negative for morale - at some stage you need that clarity and focus and people who are up for that struggle. Whether Intel's program ensures enough of those people are still around is another question and instinctively one of the more critical ones. But Lip-Bu has very good form in being able to hire talented outsiders and turn companies around (Cadence for one), so he may be able to do the same for Intel, even if the reductions lose a lot of the smarter people. Leadership really does matter here - and if new leaders from outside Intel are needed, so be it. At this point, I'd view Intel rather like a sports team that's performing well below its potential (some talented players still, but just not getting the results) and that could do substantially better with new management and direction.

And Lip-Bu isn't an instinctive cost-cutting finance type - Intel has avoided a far different future where private equity types get more directly involved- he's far more about building and growing businesses.

Something's wrong - I'm saying too many positive things about Intel ...

 

[MKWVentures]

If he is basing this on comparing with TSMC he is doing it wrong he is mixing different work ethics when comparing with TSMC and he knows it what's the current headcount.
I expect more delay for product if they do this much reduction.

Best of all it looks like a circus to me.

Foundry needs to compare to TSMC. Intel Product needs to compare to Nvidia, AMD, Qualcomm, Broadcom.
What we know is that by all measures Intel has too many people in all groups. Unfortunately, some intel employees think they need MORE people.... they are the problem IMO.

Another thing that might come out of this..... In my business model for Intel, 35% of the Intel people are working on projects with minimal revenue and or extensive losses. Those could be cut completely and there would not be a negative impact on current EPS (not saying about future). Intel need major overhaul, not a Make Intel Great Again campaign.

 

[kevin01]

Foundry needs to compare to TSMC. Intel Product needs to compare to Nvidia, AMD, Qualcomm, Broadcom.
What we know is that by all measures Intel has too many people in all groups. Unfortunately, some intel employees think they need MORE people.... they are the problem IMO.

Another thing that might come out of this..... In my business model for Intel, 35% of the Intel people are working on projects with minimal revenue and or extensive losses. Those could be cut completely and there would not be a negative impact on current EPS (not saying about future). Intel need major overhaul, not a Make Intel Great Again campaign.

Hock Tan kind of cut.

 

[MKWVentures]

Exactly, a bunch of bleeding hearts, need to suck it up.

Intel is not a spa, trim to the bone, prepare for Lip-Bu Tan's Intel 6.0 (or 7.0 ... I lost count).

Regardless of what Tan says in public, mostly politically focused at Trump and his wet-dreams of chip supremacy, Tan leans fabless, favoring design efficiency over Gelsinger’s fab-heavy strategy, aligning with Apple, AMD, and Nvidia trends.

Tan’s history at Cadence and investments in design-focused firms suggest preference for fabless model’s flexibility, cost-efficiency.

Don't forget, Gelsinger fired Tan from Intel's board, reportedly over strategic disagreements (Fab vs Fabless).

As of the latest cuts:

Revenue per Employee
Intel ~$570,000
Qualcomm ~$870,000
AMD ~$1,200,000
TSMC ~$1,270,000
Nvidia ~$1,420,000
Apple ~$2,400,000

Other than Apple (software and marketing) this is a good comparison. double the revenue per employee

 

[MKWVentures]

That sure is one leaky ship. I'm surprised Reuters did not leak this one first. They are such a credible source.

It is fairly common for companies to intentionally leak info like this. I have seen company execs send the internal memo to Reuters on purpose.
The feedback from employees is pretty interesting today. Tomorrow should get even better. Lets see what gets announced. I still believe the financials are very problematic but we will see what they say.

 

[Xebec]

At this point, I'd view Intel rather like a sports team that's performing well below its potential (some talented players still, but just not getting the results) and that could do substantially better with new management and direction.

My gut is this is too optimistic:

- During downsizing, true talent often has options and will just leave in advance

- BK has superstars like Jim Keller quit early, Jim's interviews indicate morale was completely broken back when he was there

- The products side is arguably executing worse than fabs; ARC has been a disaster (Raja legacy), Arrow Lake was a poorly executed launch and 6 months later they're still trying to get it to advertised performance, 13th/14th gen reliability issues took a year+ to "resolve", and a few server chips were in endless delay cycles until they finally cut features. Intel's LGA platforms are behind AMD AM5 for features; Intel historically leads the way.

Even on the fab cost side; in theory Alterra and ARC should have been 'captive customers' - guarenteed fab fillers if they needed more chips to sell.

I really want Intel to succeed, but it's going to require "Sufficiently Advanced Magic" at this point.

 

[soAsian]

Consider, Tan is performing as if he's all-in on bringing chips back to America. That's exactly what DC wants, and the ship was already heading in that direction.

Continue to reduce non-essentials (~60%) slowly morphing towards a fabless profile.

18A and its derivative half-node will run at least 3.75 more years.

All the while, as @MKWVentures puts it, continue to make the "best business decisions", which will resemble the Nova Lake decision.

Just another NSWAG

bruh, Trump ain't going to be happy about that. Made in USA. MAGA!

the problem with MAGA is Trump already backing down/walk back on China tariffs.