Intel plans to lay off 20% of its workforce, sees changes in AI operations, know why

One of the tech giants of the Silicon Valley, Intel, is all set to layoff over 20% of its workforce, to optimize operations and eliminate administrative bottlenecks. According to a report in Bloomberg News, Intel’s wider strategy to concentrate on a culture that is more engineering-driven has led it to plan the massive layoff. On Wednesday, Intel saw its shares going up more than 4.5% in premarket trading. After Lip-Bu Tan took over as the new CEO in Intel, this is the first major overhaul under her as she gears up the company to overcome it from many years of challenges and management wrongdoings.  

Reuters reported that Tan also had plans to overhaul Intel’s manufacturing and AI operations following the beleaguered firm's loss of its leading position in the chipmaking sector to Taiwan Semiconductor Manufacturing Company (TSMC). Other opportunities the company missed have been not catching up to the rising demand for AI processors, letting competitors like Nvidia rule these markets. 

Since Tan took over, she has been planning a lot to change many areas in the firm including laying off and changing leadership brass. Just last week, Tan was cutting shirt the firm’s leadership team and even chose a new AI chief to take care of Intel's artificial intelligence goals. The chipmaker's upcoming Q1 results on Thursday will provide insight into Tan's restructuring plan, which may be challenged by the intensifying US-China trade tensions and potential retaliatory tariffs.