Intel Reportedly Slashing Workforce To 2007 Levels

Intel’s new turnaround strategy aims to prepare it for the 2030s. This includes a potential partnership with Taiwan Semiconductor Manufacturing to bolster ‘America First‘ advanced chip production and a deal with Silver Lake Management to offload its programmable chip unit, Altera. But the overhaul doesn’t stop there—Intel is also expected to continue addressing its bloated workforce with another round of cuts sometime this week.

If Intel wants to compete effectively in the 2030s, it must “streamline management and rebuild an engineering-driven culture,” according to a new Bloomberg report that cited sources who say a massive 20% workforce reduction will be announced imminently. 

Data from Bloomberg shows that Intel went on a hiring spree during Covid but has since been trimming its workforce. Last August, the chipmaker laid off 15,000 employees, and as of Q4 2024, had about 109,000 employees on its payroll.

The incoming cuts will bring total workforce levels back to a range seen right before the GFC (2007 level: 86k workforce) —or about 18 years ago. 

Intel has been struggling for a while, and in recent quarters, management has been attempting to right the sinking ship with a turnaround plan:

• Intel, TSMC Tentatively Agree On Chipmaking JV In ‘America First’ Era

• Intel To Sell 51% Of Altera To Silver Lake In $8.75 Billion Deal As Turnaround Accelerates

In February, Robert W. Baird analysts wrote in a note to clients that the Trump administration was working to broker a JV between Intel and TSMC, one which would focus on something we said last August has excess value at the Intel enterprise, namely its fabs… 

Intel has 15 fabs; the fabs alone are worth $10bn/each in liquidation value.

The value created by management is negative $50 billion. https://t.co/HkqUQJ4A6J

— zerohedge (@zerohedge) August 2, 2024

Last week, Reuters reported that new CEO Lip-Bu Tan flattened the leadership team to trim workforce numbers to remove bureaucracy.

Intel shares are up about 5% in premarket trading around the $20 handle. Shares trade at 2010 lows.  

The turnaround won’t be easy and will take time. A question for the management team is whether the transformation will be completed before the 2030s. And why is that? Well … read here.