Lip-Bu Tan, CEO of Intel, Intends to Remove Staff in Order to Restructure the Business

A media report claims that when Lip-Bu Tan, Intel's new CEO, takes charge this week, he is ready to make "tough decisions" like layoffs and a major overhaul of the company's artificial intelligence policy. In an effort to revitalise the faltering tech giant, which recorded a $19 billion deficit in 2024—its first annual loss since 1986—the 65-year-old former CEO of Cadence wants to address what he sees as a "bloated middle management layer" while modernising manufacturing operations and AI programs. According to individuals briefed on the meeting, Tan told staff members that tough decisions would need to be made during a recent town hall meeting. According to semiconductor specialist Dylan Patel, Pat Gelsinger, the former CEO, was "too nice" and hesitant to fire middle management when necessary.

The New Business Strategies of Intel

One of Tan's main goals is to revamp Intel Foundry, which currently manufactures chips for outside customers like Nvidia. The company wants to aggressively pursue new clients while restarting manufacture of AI server chips and expanding into software, robotics, and AI foundation models. Tan left the board of Intel last August due to disagreements with the company's leadership, but he later returned as CEO after ten years of mistakes that saw Intel lose out on opportunities in AI processors and smartphones, letting Arm Holdings and Nvidia take the lead in these markets. His plan seems to be an improvement on Gelsinger's original plan, which aimed to turn Intel into a contract chip maker competing with Taiwan Semiconductor Manufacturing Co., rather than a radical departure from it.

Future of Intel’s Business

Strong sales of Intel's upcoming Panther Lake chips, which will have AI capabilities and make use of the company's new "18A" manufacturing technique, are crucial to the company's financial recovery this year. Industry watchers believe Intel's contract manufacturing unit might succeed if Tan wins at least two significant customers. According to reports, Nvidia, Broadcom, and Advanced Micro Devices are expressing interest in Intel's enhanced production techniques, which could indicate that Tan's recovery efforts are getting off to a good start.

More Focus on AI Chip Manufacturing

Tan principally wants to focus on increasing Intel’s chip-making division. Previously, the tech company only produced its own chips, but now it also produces them for Nvidia and other businesses. Tan wants to strengthen this aspect of the company and attract more clients. He also aims to increase Intel’s AI initiatives. In the development of AI chips, the company has lagged behind rivals such as Nvidia. Tan aspires to revive Intel's AI initiatives and diversify into fields such as robotics, software, and intelligent AI systems.