New Intel boss is all about ‘deleveraging’ the x86 giant Intel's new CEO Lip-Bu Tan is swinging the ax again, with another round of layoffs incoming as Chipzilla tries to reboot its core. Earlier reports suggested Intel could shed up to 20 percent of its current workforce, or around 20,000 people. In a note to investors during a Q1 2025 earnings call Thursday, Tan emphasized the …
"As I said when I joined, we need to make some very hard decisions "
No it's not. It's the simplest thing you can do. You don't know these people, you don't care about these people, you've never met these people, so no, it's it's very, very easy for you to do,"
So stop lying and say
"Yeah, I need number to go up, so I'm just dumping people on the job market, to make sure I get a bonus this year"
Exactly. The suits at any moderately-large corporation neither know nor give a shit about their employees, save for the 3-4 they pass on the way to their office and chat with.
To a suit, an employee is just an expense, not a part of production. Which would, of course, be why companies like Intel and IBM are committing long-term suicide, and are starting to see the results of those misguided "profits first" ideas.
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When I was a blue-badge at Intel (hence AC) the headcount number was consistently around 90-95K, and that wasn't very long ago, so it does on the face of it seem that there's been headcount growth.
However given that whole sites in Oregon & California are now effectively mothballed, or ghost buildings, I'm wondering where the new cuts will fall. I really hope L-B-T doesn't do an IBM and offshore everything.
It was back in 2011 when Intel headcount broke through the 100,000 mark, but it then bounced along in the 103-17k range up until 2017. It was the period 2021 and 2022 saw the greatest growth, so there's three years to focus on: 2010/11, 2020/21 and 2021/22. In 2010/11 Intel made ten acquisitions including Infineon and McAfee, and in the three years 2020-22 it made 11.
https://www.macrotrends.net/stocks/charts/INTC/intel/number-of-employees
So yes, there's been headcount growth but (without doing any number crunching) it looks to be because Intel's board pursued a strategy of acquisitive growth over internal innovation. So exec resource was targeted on global M&A juncketing, and the hundreds of previously acquired companies weren't led to innovate and contribute. Case in point, Mobileye, Israeli self-driving software company, bought for over $15 billion back in 2017, and still hasn't made a cent of net profit - in fact, net loss of $3bn in both of the last two financial years. And where was there ever a fit with Intel? Nowhere.
I'd say LBT is right to focus on simplifying Intel, and probably needs to get rid of the unprofitable or irrelevant accretions, although I fear that Intel is now the corporate equivalent of the Antikythera mechanism. And I don't mean working out what the mechanism is and originally did, I mean the mechanism itself, a fossilised mix of metal, corrosion, silt and long dead marine life.
There’s an old Onion or possibly (the fondly missed) SatireWire story that comes to mind - the gist of it was that a company had realised that they saved $X million for each batch of workers they fired, so having run out of their own employees, they’d started firing those of other companies as well to make even more savings…
Cannot help but think a lot of this de-labouring, RIF or euphemism de jour is akin to "good" old fashioned asset stripping where the asset in this case is the skilled experienced workforce.
Eventually you exhaust saleable assets but presumably just before then you take the company private and/or flog the bones to a private equity outfit to suck the marrow.
I have an idea Intel was created by former Fairchild employees, so perhaps some of de-laboured Intel people might create something new where non-compete clauses permit - or they could sod off to jurisdictions where US legal process is ignored which is an increasingly large part of the planet.
<sarcasm>It makes so much economic sense to make $200K/year engineers type their own memos* and faff about, making their own corporate travel arrangements, instead of having a $90K/year support staffer doing it for them.</sarcasm>
* This morning at 5:30 AM I witnessed the following: my lead pulled out his Android smartphone, activated it, and said, "Call Sung," and put it on speakerphone.
*Ring* ... *ring* ... *ring* ... *ring* ... "Oh, my God, Steve, is everything all right?"
"Everything's fine. I'm so sorry to wake you, Pam. I voice-dialled Sung, but the phone called you, instead. After all, 'Sung' sounds so much like, 'Pam'. Again, I'm sorry; go back to bed."
So please, Reg readers, don't suggest that voice-to-text programs will usefully replace typists this year.
The unfortunate thing is that companies don't ever know who their most valuable employees are. Could be somebody who (very unfashionably) calls out a misguided investment or acquisition and stops the company losing a load of money, or getting embroiled in a distraction. Could be a skilled PA who ensures that their senior manager has their time and diary efficiently controlled. Could be a middle manager who personally produces nothing but motivates a successful team. Could be a supervisor who is a brilliant mentor and develops talent from the most unpromising recruits. Could be a single IT bod who keeps the IT security tight. Could even be somebody who productively does virtually nothing, but personally and socially is cohesive for the organisation, etc etc.
But when it comes to the handing out of pink slips, none of those people will be recognised for their contribution. It'll mostly be top management keep their favourites, and the same model all the way down, excepting where the really big cheese has signed the death warrant of an entire operation.
True dat. I had an engineer - let's call him Kev - who worked for me who was great. He came in on time, worked all day and went home on time. He didn't spend the first half hour of the day in the kitchen chatting, didn't spend an hour a day wandering about talking to people about cars and stuff and he didn't spend an hour a day reading the free mags and papers (it was a while ago). Kev was good at his job, reliable and customers loved him. If I needed something doing well with a hard cut-off then he was my go-to guy. When my director called me in to talk about redundancies guess whose name was top of his list. "But he's never here! He comes in on time, leaves on time - where's his commitment?". The amount of time Kev spent on site was the boss's sole justification for deciding that Kev should be top of the list of lives to be fucked with. I made sure he didn't lose his job.
***** "But he's never here! He comes in on time, leaves on time - where's his commitment?"
That made my blood boil... "ass in chair" managers should be first against the wall when the revolution comes.
Good on you for fighting for Kev. If that director was that fucking clueless that he didn't know Kev was a good worker HE should be at the top of that list.
And then do something to retain the volunteers. They are the people who know they can get work elsewhere because they are good at their job.
A bank in Ireland in pre Y2K times offered voluntary redundancy, a significant portion of those that left in the IT field were rehired as consultants at much better pay within 12 months. And in many cases had exited with a package and pension and were quite literally laughing all the way to the bank each day.
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Stir up shit like this, offer voluntary redundancies and see who the first volunteers are.
This is not necessarily an accurate test.
People can be really good at their jobs, yet be totally unsuited to/bad at creating a snappy resume, ensuring it has all the right buzzwords, interviewing, mouthing all the right happy corpspeak phrases, and "proving" their worth to a succession of interviewers whom may or (more-likely, these days) may not understand shit about the relevant technologies, the technical environment, and the true skill requirements for the job in question.
These skilled employees may actively hate the bullshit rhat goes with job-hunting, and are perfectly content working for Company X for the rest of their lives.
Surely, (don't call me Shirley) you don't meant the HR types looking for 5 years windows 11 experience? Or the interviewer standard question, "Tell me about a time you had a conflict in work and how you dealt with it?" to which you trot out the same example you gave to the last 10 interviewers who asked the exact same question at the exact same point in the interview.
Or my all time favorite "How would you fix this obscure issue on an even more obscure app?"
"I'd google it , call the vendor and review the documentation. You do have documentation don't you?"
--Silence
More's the pity.
Intel seems to be pretty thick around the middle, with (too) many layers of management replicating each other. Any company that size is going to have a lot of bureaucracy, but Intel could write the book.
Laying off (de-labouring, whatever) factory techs, R&D folks, engineers and so on, isn't going to help matters. Not long-term, anyway -- maybe it'll give a short-term boost to the balance sheet but even that is debatable when you factor in severance costs and such.
Requiring more RTO isn't going to help either. The people who genuinely need to work onsite (fab and factory, lab and datacenter folks et al) already are. The rest aren't going to magically be more productive after an enforced daily commute if they've been carrying on well enough remotely.
This talk about "tough decisions" and all that is an oft-repeated playbook to cut the workforce again... because it worked so well the last dozen times, right?
Even a casual observer can figure out Intel have gotten to the moribund state they're in over years of mis- and over-management, dysfunction, fiefdoms, infighting, bureaucracy, inefficiency, and an overall unwillingness to adapt to changing times. There's no 1 cause for it all, just as there's no 1 magic answer that's going to fix it all, certainly not in short order. Perhaps this time try cutting more management if you really do want to simplify the business, since a lot of them are responsible for that list of problems, and more.
Intel goes through a cycle every 2-4 years almost without fail:
1) "We have too many layers of management. Let's get rid of several layers for efficiency & speed."
...time passes...
2) "Managers have too many direct reports in their teams. One manager can't be responsible for so many individual contributors across diverse activities. Let's split groups up and have managers who are laser-focused on just one product area."
...time passes...
3) GO TO 1
There used to be a metric for workers/managers. It may have come from the early days of Hewlett Packard. For technical types who had experience, it was: ~ 1 tech manager for 10 techs. The trick was that this worked its way up the pyramid, so 10 of these managers had 1 manager - i.e. The structure was: out of 111 people there were only 10 managers with 1 senior manager. In a larger workforce that works out to 1 boss, 10 seniors, 100 managers, and 1000 tech workers - Roughly 11% of the staff in a highly technical business are managers. In my days in the UK Scientific Civil Service, that ratio was about right. The salary ratio was probably ~1: 2: 1.5, indicating that wages/costs for management might have been ~20%.
In a standard business where staff turnover could be higher and less training was needed, the rate could be 1:50 (Like a large Supermarket chain?) - Or 2,500 workers, 50 managers and 1 boss/board; although typically there would be, say, 5 senior managers between the boss and management. So ~ 2.2% of staff are managers, but their salary ratios may be closer to 1: 1.3: 1.5 indicating that management costs are closer to 3%?
These days, the S/VP and C level staff might be on 10-50 times staff salaries, with some CEOs on >200 times?
Problem is, Intel tend to avoid cutting into the higher layers of management.
It's not that difficult to layoff 1st- or 2nd-line managers, but it's harder to get directors and VP's further up the ladder. You have to do both when cutting, else the lower levels just get replenished with bozos at some point in the cycle.
C-grade (sub-par) GM's, VP's and Dirs hire C-grade (or worse) managers, and it degrades from there.
See this "word" is why he is on the big bucks salary. Takes a special kind of genius to come up with that.
In any round of corporate firings I've seen it was always interesting what euphemism they would come up with. With de-laborating we are a long way from the world of downsizing rightsizing, re-engineering, happysizing, correctsizing.
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Reports elsewhere suggest that demand for Intel's latest-and-greatest processors has been poor (hence the 8% drop in revenue from their CCG - the unit which oversees their processor sales). Customers are instead apparently buying older, cheaper, last-gen parts which don't have the AI capabilities Intel are charging so much for. Have Intel backed the wrong horse again?
Intel seemed have backed the wrong horse at every possible opportunity since 2003. Take a look at the Wiki list of Intel acquisitions, and there's very, very little that look like good strategic and commercial choices. There's no consistency, it just looks like the M&A was done with the same planning and wisdom as a kid let loose in a sweetshop.
To be fair, prior to 2003 the company were hugely focused on networking and communications acquisitions. After that it seems they'd buy just about anything that was for sale.
It has very little to do with AI and everything to do with the fact that their latest CPUs are slower than their own previous generation as well as slower, hotter and less efficient than AMD's last THREE generations. And the previous two generations of Intel CPUs are so poorly made they degrade with use. Who wants a slow, inefficient CPU that will die in 6 - 12 months?
Sadly that seems to be the playbook these days. And for some reason manglement seems to think that only the lazy slackers will leave, whereas in my observations it's the good people who say to hell with this I'm out. I have seen many a leech cling on to the last possible moment because looking for new employment would be a serious challenge. Strangely the effect seems to reverse as you climb the totem pole with absolute idiots seemingly bouncing around from job to job with ease as you approach the top 2 layers of an organization.
Its amazing how this is another example of the American formula we see everywhere.
Doge firing anyone and everyone. There is simply no way Musk or this guy can possibly have analuzed and understood all the people and moving parts.
ITs like America is in a race to destroy itself.
Say good bye to Intel, soon all they will have left is their CEO installing a flag pole, and playing golf.
Where does changing in-office requirements from 3 to 4 days a week improve company performance? Save money? Make people more efficient? For production staff, it's rather obvious. Not so much for some other office workers unless the company also generates income from the sale of petrol or train fares. Maybe the on-site lunch cafes are such a good profit center that it's important to make sure there's 100% utilization, also making it easier for executive staff to get free lunches that get buried in the books.
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