Intel reported its Q1 2025 financial results on 24th April 2025, delivering revenue, gross margin, and earnings per share (EPS) above guidance. Despite this, the company has made plans to reduce costs by cutting staff.
Chief Executive Officer, Lip-Bu Tan, emphasised that Intel must address significant internal and external challenges to maintain momentum. He noted a “volatile and uncertain macroeconomic environment” reflected in the company’s Q2 outlook and acknowledged that Intel must confront areas requiring improvement
A major theme of Tan’s message was cultural transformation. He commented: “The feedback I have received from our customers and many of you has been consistent. We are seen as too slow, too complex and too set in our ways – and we need to change.”
To address these concerns, Intel announced several structural reforms aimed at returning the company to its engineering roots and improving agility:
- Engineering focus: core engineering functions have been elevated to the Executive Team, with a focus on removing administrative burdens and accelerating innovation
- Cost reductions: operating expenses and capital spending targets have been reduced to bring Intel’s cost structure in line with competitive benchmarks
- Flattening the organisation: Tan called for the removal of unnecessary management layers, increasing spans of control, and empowering top performers. He stressed: “I’m a big believer in the philosophy that the best leaders get the most done with the fewest people.”
- Workforce reduction: Tan confirmed that these structural changes would lead to a reduction in Intel’s workforce starting in Q2 2025
- Process simplification: efforts will be made to reduce internal administrative work, eliminate unnecessary meetings, and modernise decision-making tools. Formal Insights and OKR requirements will become optional, with reductions in non-essential training and documentation
- Updated return-to-office policy: from 1st September 2025, hybrid employees will be required to spend four days per week on-site, up from three
Tan positioned these changes as essential to restoring Intel’s reputation for innovation and execution. He framed the coming months as a critical inflection point: “There are two ways teams can respond at make-or-break moments like this: They can look at the gap they need to close and give up – or they can look inside themselves and fight like never before.”
He concluded with a clear message of intent, expressing confidence in the future: “Intel was once widely seen as the world’s most innovative company. There’s no reason we can’t get back there, so long as we drive the changes needed to improve.”
