Investing.com - Shares in Intel (NASDAQ:INTC) were higher by more than 2.5% in premarket U.S. trading on Wednesday after a media report said the chipmaker was planning to cull over a fifth of its workforce.
According to Bloomberg News, Intel is moving to roll out the reductions in a push to streamline the business and lower inefficiencies.
Under new Chief Executive Lip-Bu Tan, who assumed leadership of Intel in March, the ailing semiconductor giant is looking to bring the focus of its operations back to engineering, Bloomberg said, citing a person familiar with the matter.
In particular, a 17 billion-euro facility in Ireland -- its largest outside of the U.S. -- is considered to be a critical piece in Intel’s bid to reverse flagging recent performance, Bloomberg added.
Tan previously told staff after he took over that the firm was facing "tough decisions" as part of a new strategy that revolved around an overhaul its approach to artificial intelligence and eradicating what he described as a bloated layer of middle management.
Intel’s crucial chip segments also now report directly to Tan, in a sign of a flattening in the group’s leadership team, Reuters has reported.
The planned job cuts come after Intel said last August that it was moving to slash 15% of headcount, amounting to roughly 15,000 positions. Intel had 108,900 employees at the end of 2024, compared to 124,800 in the prior year, Bloomberg reported.
Those layoffs, which were part of a drive to slash costs by $10 billion, were seen as moves to help the company offset an expensive pivot to AI chips. Intel has long been viewed as a laggard in the race to build out this technology, trailing behind rivals like AI-darling Nvidia (NASDAQ:NVDA). Sales have slumped for three consecutive years.
Santa Clara, California-based Intel is due to report its first-quarter earnings on Thursday, with investors keen to see if Tan will provide more insight into his vision for Intel.