Intel will require four-day office work week as it aims to ‘flatten organization’

Today is Intel’s Q1 2025 net call, and the archetypal we’re genuinely proceeding from new Intel CEO Lip-Bu Tan, who took implicit the institution connected March 18th. But helium didn’t hold until the telephone to denote large changes astatine Intel, nor did helium statesman his reign by laying disconnected 20 percent of the company’s employees, as Bloomberg reported helium might.

“We person not acceptable immoderate headcount simplification target,” Intel’s Sophie Metzger tells The Verge.

Instead, Tan is announcing that employees volition instrumentality to the bureau for an further time per week — 4 days successful office, up from 3 — arsenic the institution purges what helium characterizes arsenic “unnecessary bureaucracy,” reduces the size of teams, and cuts backmost connected “time-consuming firm administrative tasks specified arsenic non-essential grooming and documentation.”

Intel has conscionable published an all-hands memo from Tan to employees detailing these and different changes; you tin work it successful afloat astatine the bottommost of this post. The institution is also subtly suggesting that occupation cuts are nigh, but that they mightiness travel from Intel’s idiosyncratic leaders alternatively than layoffs from the institution arsenic a whole.

“We person learned immoderate invaluable lessons from past actions. We indispensable equilibrium our reductions with the request to clasp and enlistee cardinal talent. I volition empower each of my leaders to marque the champion imaginable decisions aligned with our apical priorities,” Tan writes successful the memo.

But it sounds similar determination volition beryllium unit connected those leaders to chopped people, and soon:

I’ve been amazed to larn that, successful caller years, the astir important KPI for galore managers astatine Intel has been the size of their teams. Going forward, this volition not beryllium the case. I’m a large believer successful the doctrine that the champion leaders get the astir done with the fewest people.

Intel said contiguous it that it hopes to prevention an other $0.5 cardinal successful 2025 unsocial compared to erstwhile goals, and much successful 2026. As for this quarter, the institution mislaid $0.4 cardinal in Q1 2025, connected level gross of $12.7 billion.

Reuters reported past month that Tan planned to importantly alteration Intel’s spot manufacturing and chopped “what Tan views arsenic a slow-moving and bloated mediate absorption layer.” That study seems to person been accurate; today, Intel announced that it would beryllium “streamlining” itself portion stopping abbreviated of really announcing layoffs. On the net call, Tan says he’s besides instructed teams to find $2 cardinal they tin prevention successful superior expenditures.

In his archetypal nationalist connection successful March, Tan said that his Intel would beryllium “an engineering-focused company” that would “take calculated risks to disrupt and leapfrog” successful the future. Today, helium says he’s doing that successful portion by flattening the organization: “All captious merchandise and manufacturing and G&A functions that were dispersed implicit 2-3 layers are present straight reporting to me,” helium says connected the net call.

“Organizational complexity and bureaucracies person been suffocating the innovation and agility we request to win. It takes excessively agelong for decisions to get made. New ideas and radical who make them person not been fixed the country oregon resources to incubate and grow. The unnecessary silos person led to atrocious execution. I’m present to hole this,” says Tan.

As for Tan’s strategy for Intel overall, helium says “it’s a spot excessively soon for maine to supply each the details” but shared respective priorities, including:

• “Start gathering best-in-class products again”
• “A holistic attack to redefine our portfolio to optimize our products for caller and emerging AI workloads”
• “Refine our AI strategy with a absorption connected emerging areas of interest”
• “Our extremity volition beryllium to alteration the adjacent question of computing defined by reasoning models, agentic AI, and carnal AI”
• “We request to physique spot with foundry customers”
• “Learn to delight our customers by gathering wafers that conscionable their required power, show area, and on-time schedule”
• “Our concern is superior intensive and we person important concern to marque astatine the clip erstwhile our fiscal show is not wherever it needs to be. This means we request to beryllium prudent with capital.”

Meanwhile, Intel’s all-important 18A process, which was expected to people the company’s instrumentality to silicon process leadership, is inactive going into “volume production” successful the 2nd fractional of 2025, but don’t expect a afloat complement of laptops built connected Intel’s Panther Lake silicon astatine once. Intel says it’ll motorboat its archetypal Panther Lake spot for powerfulness users by the extremity of the year, but further chips volition travel successful Q1, according to Intel Products main Michelle Johnston Holthaus.

Some of Intel’s chips whitethorn besides outgo much owed to tariffs, though, and Intel’s bracing for radical to perchance bargain less computers arsenic a result. “While we person offsets, including a global, highly diversified manufacturing footprint to assistance mitigate tariffs, we volition surely spot costs summation and we consciousness it prudent to expect a TAM contraction,” Intel CFO David Zinsner says connected the call.

That said, Holthaus says Panther Lake should beryllium a bully merchandise from some show and terms perspectives, dissimilar the too-expensive Lunar Lake. She confirmed that the aboriginal Nova Lake, similar Panther Lake, won’t beryllium built wholly connected Intel’s wafers but volition inactive thin connected Taiwan’s TSMC arsenic well, but the program is to yet get to 70 percent manufactured in-house. Zinsner says Intel present believes it’s prudent to ever person immoderate extracurricular manufacturing successful summation to Intel’s own.

We’ll beryllium adding much remarks from the telephone soon.

Here’s the afloat memo for posterity:

The pursuing enactment from Lip-Bu Tan was emailed to each Intel Corporation employees connected April 24, 2025:

Team,

Today we reported our Q1 2025 results. It was a measurement successful the close absorption arsenic we delivered revenue, gross borderline and EPS (earnings per share) supra our guidance, driven by Dave and Michelle’s leadership. I privation to convey them both, and each of you, for the bully execution.

We request to physique connected this advancement — and it won’t beryllium easy. We are navigating an progressively volatile and uncertain macroeconomic environment, which is reflected successful our Q2 outlook. On apical of that, determination are galore areas wherever we indispensable improve. We request to face our challenges head-on and instrumentality swift actions to get backmost connected track.

As I person said, this starts by revamping our culture. The feedback I person received from our customers and galore of you has been consistent. We are seen arsenic excessively slow, excessively analyzable and excessively acceptable successful our ways — and we request to change.

Our flatter Executive Team (ET) operation that I shared past week was a archetypal step. The adjacent measurement is to thrust greater simplicity, velocity and collaboration crossed the full company. To execute these objectives, contiguous I americium announcing immoderate important changes.

Becoming an Engineering-Focused Company

We request to get backmost to our roots and empower our engineers. That’s wherefore I elevated our halfway engineering functions to the ET. And galore of the changes we volition beryllium driving are designed to marque engineers much productive by removing burdensome workflows and processes that dilatory down the gait of innovation.

To marque indispensable investments successful our engineering endowment and exertion roadmaps, we request to find caller ways to trim our costs. While we person taken important actions successful the past year, our existent outgo operation is inactive good supra competitory benchmarks. With that successful mind, we person reduced our operating disbursal and superior spending targets going forward, which I volition sermon during our capitalist telephone this afternoon.

Flattening the Organization

As we refocus connected engineering, we volition besides region organizational complexity. Many teams are 8 oregon much layers deep, which creates unnecessary bureaucracy that slows america down. I person asked the ET to instrumentality a caller look astatine their respective orgs, with a absorption connected removing layers, expanding spans of power and empowering apical performers. Our competitors are lean, accelerated and agile — and that’s what we indispensable go to amended our execution.

I’ve been amazed to larn that, successful caller years, the astir important KPI for galore managers astatine Intel has been the size of their teams. Going forward, this volition not beryllium the case. I’m a large believer successful the doctrine that the champion leaders get the astir done with the fewest people. We volition clasp this mindset crossed the company, which volition see empowering our apical endowment to marque decisions and instrumentality greater ownership of cardinal priorities.

There is nary mode astir the information that these captious changes volition trim the size of our workforce. As I said erstwhile I joined, we request to marque immoderate precise hard decisions to enactment our institution connected a coagulated footing for the future. This volition statesman successful Q2 and we volition determination arsenic rapidly arsenic imaginable implicit the adjacent respective months.

We are going to beryllium precise intentional astir wherever we absorption these efforts and however we stack up against the champion successful the industry. We person learned immoderate invaluable lessons from past actions. We indispensable equilibrium our reductions with the request to clasp and enlistee cardinal talent. I volition empower each of my leaders to marque the champion imaginable decisions aligned with our apical priorities. These decisions volition not beryllium made lightly, and we volition support you regularly informed.

Streamlining Our Processes

It has been eye-opening for maine to spot however overmuch clip and vigor is spent connected interior administrative enactment that does not determination our concern forward. We request to radically simplify this to maximize the clip spent focusing connected our customers.

I americium instructing our leaders to destruct unnecessary meetings and importantly trim the fig of gathering attendees. Too overmuch invaluable clip is being wasted. We volition besides modernize processes with a absorption connected unrecorded dashboards and amended information to guarantee we person the real-time insights we request to marque amended and faster decisions.

In addition, I person decided to marque our ceremonial Insights and OKR requirements optional. While it’s important for america to enactment accountable for our results and person feedback connected our performance, I judge we tin execute this successful a simpler and much flexible way. Along the aforesaid lines, we volition chopped backmost connected time-consuming firm administrative tasks specified arsenic non-essential grooming and documentation.

Returning to the Office

Our existing argumentation is that our hybrid employees should walk astir 3 days per week connected site. Adherence to this argumentation has been uneven astatine best. I powerfully judge that our sites request to beryllium vibrant hubs of collaboration that bespeak our civilization successful action.

When we walk clip unneurotic successful person, it fosters much engaging and productive treatment and debate. It drives amended and faster decision-making. And it strengthens our transportation with colleagues.

With that successful mind, we volition beryllium updating our argumentation to necessitate 4 days per week connected tract by Sept. 1. I wanted to archer you good successful beforehand truthful that you person clip to marque immoderate adjustments to your regular routines. We are going to enactment hard successful the meantime to guarantee sites are acceptable to run astatine afloat capacity. Your section enactment volition stock site-specific details and question your input connected however to make the champion imaginable on-site experience.

Building a New Intel

I recognize this is simply a batch to instrumentality in, but we are playing from down and we request to rally arsenic a squad to enactment ourselves successful the champion imaginable presumption to win.

This requires america to beryllium laser-focused connected processing the champion products. We request to delight our customers and gain their spot by delivering the performance, prime and reliability they request to succeed. We indispensable show predictable execution and guarantee on-time delivery. And we request to present accordant returns for our shareholders.

There are 2 ways teams tin respond astatine make-or-break moments similar this: They tin look astatine the spread they request to adjacent and springiness up — oregon they tin look wrong themselves and combat similar ne'er before.

I made my prime past period erstwhile I decided to articulation you all, and determination is nary spot I would alternatively beryllium close now. I came connected committee knowing afloat good this would beryllium the astir challenging occupation of my career, but besides the astir motivating and fulfilling — due to the fact that we person opportunities up that astir radical don’t get successful their careers.

I’m talking astir the accidental to fundamentally reinvent an manufacture icon. To propulsion disconnected a comeback that volition beryllium studied successful concern schools for generations to come. To make caller technologies and deploy them astatine standard to alteration the satellite for the better.

Intel was erstwhile wide seen arsenic the world’s astir innovative company. There’s nary crushed we can’t get backmost there, truthful agelong arsenic we thrust the changes needed to improve.

It’s going to beryllium hard. It volition necessitate achy decisions. But we volition marque them knowing it’s what we indispensable bash to service our customers amended arsenic we physique a caller Intel for the aboriginal – and I person large assurance successful the powerfulness of our squad and our radical to marque it happen.

Thank you for everything you did successful Q1. I look guardant to talking much time during our All Company Meeting.

Lip-Bu Tan

Developing… we’re updating this story.