Intel's next CEO will revamp the chip-making operations of the tech giants that fought and cut down on jobs to compete better with industry rivals, according to the report.
Lip-Bu Tan, a former Intel board member who took over on Tuesday, will focus on streamlining Intel's manufacturing processes and firing more AI chips for clients like Nvidia.
His plans include cutting down staff for the company's bloated middle management class. He claims it slows Intel's decision-making process, the report says.
Inter declined to comment.
Intel shares rose 6.6% on Monday morning.
After Intel announced Tan's appointment last week, he told Town Hall meeting employees that “strict decisions” should be made on employees at Tan's meeting, according to the meeting's manual.
Tan takes the reins from Pat Gelsinger, who was pushed out in December after three years of helm.
One criticism of Gelsinger was that he was “too good” according to semiconductor industry expert Dylan Patel.
“He didn't want to fire many middle managers in the way he needed to,” Patel said.
Gelsinger announced last August that Chipmaker would cut 15% of its large workforce. This is about 15,000 jobs.
Tan (65), former CEO of chip design software company Cadence and head of venture capital firm, appears to be ready to shake things up even more after months of disappointing revenue.
The Flailing Company reported a loss of $19 billion a year in 2024 as it struggled to compete with major semiconductor rivals such as AMD, TSMC and Samsung.
Intel missed a surge in demand for AI processors and lost Nvidia's market share. The company has since pivoted to manufacture chips for its customers.
Tan hopes to improve performance across Intel Foundry, the company's manufacturing arm that produces Microsoft and Amazon chips by actively pleading for new customers.
The company will also resume plans to produce chips that can power AI servers and focus on future developments in software and robotics, according to the report.
Gelsinger had previously announced a turnaround plan aimed at turning the company into a booming contracted chip maker that could take on TSMC.
The former CEO pledged hundreds of billions of dollars to build factories in the US and Europe, boosting chip production, but was forced to reduce those plans amid sluggish demand.
The struggling company was one of the first to receive funding from former President Joe Biden's Chips Act, and received $2.2 billion in federal grants earlier this year.
Last month, President Trump vowed to abolish the Chips Act.
As a member of the board, Tan is a critic of Gelsinger's voice and was unable to provide customer service to the same level as rival TSMC, sources said.
Tan claimed that Intel's work culture had lost the “delusional survival” spirit introduced by Andy Grove, who served as the company's CEO from the late 1980s to the late 1990s.
After months of reviewing Intel's manufacturing processes in special roles, Tan presented some of his ideas to the company's board last year, but sources said they were refused to pursue them.
He suddenly resigned from the board in August.
Currently, Tan is expected to focus on how to improve Intel's output, so it can offer more chips as it will function to produce its first in-house chips this year.
Intel says it's unlikely to create a new AI chip, at least in 2027, even those familiar with industry sources and Intel's progress.
He will also take over the company shortly after the workforce was reduced from about 15,000 to about 109,000 at the end of last year.
With post wire
