Over the past few months, Intel (INTC) has been ramping up its efforts to pick up the pieces after facing low sales and revenue for several financial quarters. The chipmaker has struggled to keep up with competitors, such as IBM, Samsung and Nvidia, due to its failure to upgrade its chip manufacturing processes.
In its first-quarter earnings report for 2025, Intel revealed that it suffered a net income loss of roughly $887 million during the first few months of this year, while overall revenue remained flat year-over-year and product revenue dropped by 3%.
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During an earnings call in April, Intel CEO Lip-Bu Tan said that the company needs to “fundamentally transform” its culture and operations as “organizational complexity and bureaucracies have been suffocating the innovation and agility” it needs to win.
Related: Intel makes a harsh decision amid declining sales
“I am taking swift actions to simplify the way we do business and drive transparency and accountability across the company,” said Tan.
Intel has since been laying off employees in droves. Last month, it told employees that 10,000 of its factory workers will be getting the boot. It also recently warned its workers that it will be shutting down its automotive business, which will result in even more layoffs.
Intel CEO has bad news for employees
As Intel makes harsh cost-cutting decisions, Tan recently gave a grim update to employees about the current state of the company.
“Twenty, 30 years ago, we are really the leader,” said Tan during a conversation broadcast to employees, according to a recent report from Oregon Live. “Now I think the world has changed. We are not in the top 10 semiconductor companies.”
He also said during the broadcast that Intel’s turnaround plan will be a “marathon,” flagging that the company is significantly behind its top competitor, Nvidia, when it comes to creating technology to train artificial intelligence.
“On training, I think it is too late for us,” said Tan, highlighting that Nvidia’s position in that market is “too strong.”
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Intel will instead focus on bringing AI capabilities directly to PCs and other devices. It will also explore agentic AI, which can complete tasks with little human intervention.
“That’s an area that I think is emerging, coming up very big, and we want to make sure that we capture,” said Tan.
As Intel continues to conduct layoffs in multiple areas of its business, Tan said that the company must be “humble” and attentive when responding to customer needs after receiving poor reviews.
The comments from Tan come after Intel announced in April that it will reduce its operating expense target to $17 billion in 2025 and $16 billion in 2026. Job cuts will play a crucial part in reaching those goals.
“There are many areas we need to improve, and there’s no quick fixes,” said Tan during the company’s earnings call in April. “We must remain laser-focused on execution.”
Intel’s competitors are also making drastic workforce changes
Intel’s peers in the tech industry have also made drastic changes to their workforces to improve their competitiveness.
Amazon CEO Andy Jassy recently scaled back remote work, cut bureaucracy, and encouraged employees to complete work faster at the company so it can “operate like the world’s largest startup.”
He also warned employees in a memo last month that the company’s workforce will shrink over time as it further invests in AI.
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“As we roll out more Generative AI and agents, it should change the way our work is done,” said Jassy. “We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”
Dell has also recently been mounting pressure on employees. Dell CEO Michael Dell told employees in a memo in January that the company will be scaling back remote work due to the fast pace of innovation in the tech industry.
“The pace of innovation has never been faster, and for us to lead, the speed of our business must continue to accelerate,” said Dell. “What we’re finding is that for all the technology in the world, nothing is faster than the speed of human interaction. A 30-second conversation can replace an email back-and-forth that goes on for hours or even days.”
Related: Dell CEO’s harsh new policy for employees isn’t going as planned
