Intel Restructures Leadership and Plans Job Cuts to Focus on AI

Intel Restructures Leadership and Plans Job Cuts to Focus on AI

Intel is undergoing a significant restructuring of its leadership and organizational framework, which includes plans to lay off around 10,000 employees as part of a strategy to sharpen its focus on the artificial intelligence (AI) sector. This initiative is led by the newly appointed CEO Lip-Bu Tan, following the departure of former CEO Pat Gelsinger.

Leadership Changes

The restructuring aims to flatten Intel's management hierarchy, allowing leaders of major business units, such as the Data Center and AI Group and the Client Computing Group, to report directly to the CEO. This change is intended to enhance oversight and facilitate quicker decision-making within the company. Tan has expressed the need to reduce "organizational complexity and bureaucratic processes" that have hindered innovation at Intel.

As part of this leadership overhaul, Sachin Katti, who previously led the Networking and Edge Group, has been promoted to Chief Technology and AI Officer. This newly created position consolidates Intel's AI strategy under Katti, who will oversee the AI product roadmap and manage relationships with developers. The Data Center and AI Group will be restructured, with a renewed focus on core CPU products and the development of AI accelerator chips, such as GPUs.

Workforce Reduction

The planned layoffs, set to begin in July, will affect between 15% and 20% of the Intel Foundry workforce, potentially impacting over 10,000 employees globally. According to an internal memo from Intel Manufacturing Vice President Naga Chandrasekaran, these cuts are deemed necessary to address the company's financial challenges. Unlike previous layoffs that included voluntary buyouts, this round will be based on performance reviews and strategic priorities.

Strategic Shift

These organizational changes reflect Intel's efforts to reverse years of market share losses and adapt to a rapidly evolving semiconductor landscape. By centralizing control and emphasizing AI, Intel aims to compete more effectively against rivals, particularly in the AI chip market where it has faced challenges in establishing a coherent strategy.

In summary, Intel's transformation under Lip-Bu Tan represents a significant shift towards a more streamlined and AI-focused operation, albeit with the cost of substantial job losses within its manufacturing division. The success of this overhaul will depend on Intel's ability to execute its new strategy and regain competitiveness in the industry.