Intel CEO Lip Bu Tan Takes Bold Steps To Revive Chipmaker, Says Bureaucracy Is 'Suffocating The Innovation'

Intel Corp. INTC CEO Lip-Bu Tan is taking action to revive the struggling chipmaker, announcing significant organizational changes just five weeks into his tenure.

What Happened: Tan is streamlining Intel’s leadership structure, requiring hybrid employees to work four days in the office starting in the third quarter of 2025, and enforcing stringent cost controls, as outlined in the company's first-quarter earnings call. Currently, hybrid employees are expected to spend around three days per week on-site.

“Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win,” Tan said. “It takes too long for decisions to get made.”

The chipmaker plans to reduce operational expenses to $17 billion in 2025 and $16 billion in 2026, while cutting its 2025 capital expenditure target from $20 billion to $18 billion. Intel is focusing on better utilizing existing assets before committing to new spending.

The company reported first-quarter revenue of $12.67 billion, surpassing analyst expectations of $12.3 billion, with adjusted earnings of 13 cents per share exceeding the projected 1 cent. However, Intel forecasts second-quarter revenue between $11.2 billion and $12.4 billion, below the $12.84 billion analysts expected.

Why It Matters: Intel’s stock has plummeted nearly 64% over the past five years while competitors NVIDIA Corp. NVDA and Advanced Micro Devices Inc. AMD have capitalized on the artificial intelligence boom.

Interestingly, the U.S.-China trade war has boosted demand for Intel’s older generation chips. “Macroeconomic concerns and tariffs have everybody hedging their bets,” said Michelle Johnston Holthaus, Intel’s Chief Products Officer.

The company is also redefining its product portfolio with a “workload-first approach” for emerging AI applications, including reasoning models and edge computing.

Tan urged patience from investors. “Clearly, there are no quick fixes,” he said, while encouraging stakeholders to “stay tuned” for future developments.

Price Action: Intel Corp. shares climbed 4.37% on Thursday to close at $21.49, but dropped 5.12% in after-hours trading to $20.39. Year to date, the stock has gained 6.28%.

Benzinga Edge’s Stock Rankings give the company a modest growth score of 3.61%. Curious how it measures up to semiconductor giants like Nvidia and AMD? Click here for the full comparison.

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