What just happened? Intel employees got some bad news in the company's earnings call yesterday. Not only is new CEO Lip-Bu Tan implementing a new round of job cuts that could see more than 20,000 people laid off, he is also increasing the number of days that hybrid workers must come into the office.
In a note to investors, Tan wrote that Intel would be streamlining its operations. That means cuts to various departments, the end of non-core products, a change to the return-to-office mandate, and layoffs.
"There is no way around the fact that these critical changes will reduce the size of our workforce," said Tan. "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."
"We need to get our balance sheet healthy and start the process of de-laborating this year," he added, which seems to be another newly invented corporate term for ending people's employment.
Tan never revealed how many workers Intel would be laying off, but previous reports suggest the number will be substantial. Bloomberg previously said that the company plans to cut over 20% of its current workforce, which would equate to around 20,000 employees. Tan said the cuts will affect people in the second quarter of 2025 "as quickly as possible over the next several months."
Intel laid off 15,000 people, around 15% of its workforce, last August as part of its cost-cutting moves. It eliminated another 2,000 people at several US sites the following October. There have been a further1,900 layoffs, along with 400 from Mobileye, since the start of 2025.
Tan is also mandating that hybrid workers who come in to the office three days per week increase their in-person attendance to at least four days. This will be implemented by September 1. Tan says more in-office work promotes better engagement, collaboration, and productivity – a claim that has long been debated.
More companies are cracking down on hybrid and remote workers, the most recent being Google, which told some fully remote workers to get back in the office or face termination.
Intel is aiming to reduce its $17.5 billion operating expenses by $500 million this year and $1 billion in 2016, bringing the amounts to $17 billion and $16 billion, respectively. This will include cuts to research & development and marketing. General and administrative departments will also be impacted at some point.
Tan also wants to reduce the layers of management at Intel. He said that "bureaucracy [is] suffocating the innovation and agility that we need to win," noting that many teams are "eight or more layers deep." It was only last week when Tan overhauled Intel's leadership by installing a new CTO and AI lead.
Other internal changes Tan is implementing include fewer unnecessary meetings, reducing the number of attendees, and ensuring less administrative work at Intel.
Intel projected second-quarter revenue of $11.2 billion to $12.4 billion, well below analysts' expectations. It reported first-quarter revenue of $12.67 billion, down less than 1% year-over-year and above what analysts expected.
Intel also revealed during its earnings call that its Intel 7 process node production capacity was facing shortages, something it predicted would "persist for the foreseeable future." The situation arose due to an unexpected surge in demand for its N-1 and N-2 products – Raptor Lake and Alder Lake – as consumers shun its newer, more expensive AI chips amid economic uncertainty.
Intel CEO announces massive layoffs, stricter in-office mandates, and huge spending cuts
