Intel’s new CEO Lip-Bu Tan warns of ‘tough decisions�?at first town hall: Job cuts, AI revamp and more

TOI Tech Desk / TIMESOFINDIA.COM / Updated: Mar 19, 2025, 12:00 IST

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Intel's new CEO Lip-Bu Tan is set to implement layoffs and overhaul the company's AI strategy to revive operations following its significant financial loss in 2024. Prioritizing the Foundry business, Tan aims to refine the approach, securing large customers to boost the company's recovery efforts.

Intel’s new CEO Lip-Bu Tan warns of ‘tough decisions�?at first town hall: Job cuts, AI revamp and more

Intel's incoming CEO Lip-Bu Tan is preparing to make "tough decisions" including layoffs and a significant artificial intelligence strategy overhaul when he takes the helm this week, sources familiar with the matter told Reuters.
The 65-year-old former Cadence CEO aims to address what he views as a "bloated middle management layer" while revamping manufacturing operations and AI initiatives to revive the struggling tech giant, which reported a $19 billion loss in 2024 - its first annual loss since 1986.
At a recent town hall meeting, Tan warned employees that difficult choices would be necessary, according to sources briefed on the meeting. Semiconductor expert Dylan Patel noted that former CEO Pat Gelsinger was "too nice" and hesitated to trim middle management as needed.

Intel’s Foundry business is Lip-Bu Tan’s top priority

Revamping Intel Foundry, which now produces chips for external clients including Nvidia, is among Tan's top priorities. The company plans to aggressively court new customers while restarting production of AI server chips and expanding into software, robotics, and AI foundation models.
Tan resigned from Intel's board last August over differences with leadership but returned as CEO following a decade of missteps that saw Intel miss opportunities in smartphones and AI processors, allowing Arm Holdings and Nvidia to dominate these markets.
His strategy appears to refine rather than completely overhaul Gelsinger's approach, which centered on transforming Intel into a contract chip manufacturer competing with Taiwan Semiconductor Manufacturing Co.
Intel's financial recovery this year depends largely on strong sales of its forthcoming Panther Lake chips, which will feature AI capabilities and utilize the company's new "18A" manufacturing technology.
Industry analysts believe Intel's contract manufacturing operation could succeed if Tan secures at least two large customers. Nvidia, Broadcom, and Advanced Micro Devices are reportedly showing interest in Intel's improved manufacturing processes, potentially signaling early progress in Tan's turnaround efforts.

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