Intel’s incoming CEO has some big plans for the firm’s business strategy, sources familiar with the matter have told Reuters.
Lip-Bu Tan appears primed to overhaul Intel’s chip and AI strategies to breathe new life into the firm following a rocky period of layoffs and faltering revenue returns.
Tan will restructure the company’s approach to AI as well as cut staff to trim the fat in what the new CEO sees as a bloated and inefficient middle management layer.
The plans, outlined during an internal town hall meeting at Intel, saw the CEO highlight the need to make some “tough decisions,” two people briefed on the meeting have said.
He also wants to revamp the firm’s manufacturing operations which is now targeted at selling semiconductors to outside clients like Nvidia rather than just supplying Intel itself, sources said.
Similarly, performance improvements for Intel’s manufacturing wing, Intel Foundry, are also afoot, with the company embarking on an aggressive campaign to woo potential customers.
The new CEO was announced earlier this month following the retirement of outgoing CEO Pat Gelsinger, who took the reins in 2021. Gelsinger announced plans to retire in December last year amid reports he was being forced out of the company.
Formerly the CEO of Cadence, Tan says he has huge respect for Intel and sees significant opportunities to remake the business in a way that better serves customers and shareholders.
A turbulent time for Intel
The last 18 months have been trying for the chipmaker giant, which announced a massive 15% cut to the workforce last summer, equating to 15,000 members of staff.
At the time, Gelsinger said the move was financial in motivation and in response to sluggish revenue growth. He also cited the firm’s inability to see significant returns from technology trends like AI.
Gartner analyst Alan Priestley told ITPro at the time that Intel needed to address its product side and try to “get its story right” on AI.
“Nvidia got lucky in the right place at the right time with the right products … Intel was not there,” Priestley said.
Since the cuts, Intel has seen some improvement in the AI space. A deal with AWS in September, for example, saw both firms commit to supporting a multi-billion dollar framework between their shared ecosystem.
