Thread regarding Intel Corp. layoffs

Expectations of some kind of en-masse layoff may be unfounded, and unworkable in the short term anyway.

Might be some immediate effort to reduce middle managers as that has been stated by Lip-Bu and he would seem to know what he wants to do there.

But anything beyond that and maybe shedding some low performers, is gonna take restructuring. If that is what is coming then hopefully he will have at least a framework to describe around earnings time, and maybe some actions are already underway.

I'm guessing, but would think that some project and product reviews are ongoing, with the intent on making Start-Stop-Continue type decisions. That would lead to further reductions in headcount as those actions are taken.

Also, the fabs really need to restructure, as many have pointed out. They are not organized like any foundry and that is where a lot of excess cost and inability to execute comes from. That is where the real serious headcount reductions would come from, and a few billions in annual savings as well.

The support groups are already at their benchmarks for headcount, but would see reductions if the groups they support are eliminated. Not much left to save in the support groups, imo.

Anyone still going on and on about some ridiculous layoff is merely trolling and doesn't know what is even possible at this time.

The easy headcount reductions are done, which leaves hard decisions about what the company should be doing and how it should be organized. The Board and ELT have been deadlocked on these decisions for at least the past decade. Looks like Lip-Bu has a mandate to do the right thing.

The other big mistake of IDM 2.0 was thinking they could onboard external customers in a few years. It took GF a decade to get fully up to speed and they almost went broke in the process.

18a is not even available till this year and it will take multiple years to bring each meaningful external customer onboard.

Not to regurgitate past history (too much), but to build out as if those customers were even signed up yet was unforgivable. The entire mgmt chain was told this repeatedly by Finance, so it is not just about the CEO but the blame certainly lands there too.

Notice that Keavan was gone before Pat, because a lot of this was his incompetence. He may be the worst manager I've ever seen at Intel, like someone they found on the street or something.

There was a lot of magical thinking by Sales and Planning, with fantastical lies told about all manner of roadmaps, that are now all gone.

The whole experience should be known by the Board and that should lead to more executive departures in the near future, or nothing really has changed.

I think the issue with IDM is the complexity, that it requires a conglomerate to exist. The capital requirements alone can only be funded if the company has a dominant position in some product sectors.

It's not that it can't work, but even IDM 2.0 recognized that external customers were needed to generate the amount of revenue required to fund the next Technology node.

The big error in IDM 2.0, which continues to this day, is in trying to manage such a large organization. It is both ineffective in achieving the decision velocity needed to be a market leader, and cost inefficient.

Not sure the Board or Lip-Bu accept those issues as being insurmountable. As was mentioned, their compensation is based on the size and complexity of the business so they have a vested interest in IDM.

Upton Sinclair - It is difficult to get a man to understand something when his salary depends upon his not understanding it.

IDM is an outdated business model.

One company can no longer bear all of the risk of leading edge fab development.
The risk needs to get spread across many customers.
Customers are hungry for a second source.

@d2+1jpp6fvfc I don't think the strategy has changed. It was always to improve the business, which enables various business units to be spun off or sold.

The main difference I think is that Lip-Bu will be far more focused on profitability, and in the short term that means cutting costs, particularly in Foundry.

Strategy is a guessing game because the C-Suite don't want anyone else to know what they are doing until they are ready to pull the trigger.

Getting rid of IDM (in order to reduce the size and complexity of the company) seems like the only long term solution but any eventual spin off or sale of Foundry (or Products) will be more profitable if costs are reduced (and maybe better revenues in the future as well).

As a billionaire, he is not likely doing this for the money, but rather because he thinks he has a strategy to make the company at least more profitable if not more competitive. The management reductions he is about to do may enable faster decisions, which could lead to better competitiveness.

But really, the easiest way to make the company more efficient and nimble is to shed the IDM model. Unfortunately, the size and complexity of the company is the basis for executive pay, so they are incentivized to Keep Calm and IDM On.

LBT will do the opposite of Pat.
Streamline, de-leverage and sell the fabs.
Drop everything else except for a small set of CPU and AI-GPU products.
He’ll not be encumbered by history (to quote the great RN).

@bp+1j Lip-Bu would not have accepted the position unless he was able to pursue the strategy he laid out to the Board.

Not to get into yet another pointless discussion of prior CEOs mistakes, but a clear difference between Lip-Bu and every CEO since Andy Grove will be a rigorous focus on cost and efficiency.

I suspect he will hit the ground running, with a Shock & Awe headcount reduction. The roles to be eliminated have been known for years and the low performers are also known. What was lacking was the will to do the right thing.

He is a Finance guy, not particularly a technologist. That's why he has said nothing specific about products, but I expect the sharp knives to come out and put an end to products which no longer have growth or meaningful revenue, or simply aren't the core business.

Very good chance that by the Summer, Intel is a much smaller company and on the way to being lean and focused. Now we get to see if he can execute the turnaround, because past attempts were stymied by entrenched executives who refused to take action.

There is this notion that ELT does what the CEO says, but that's not exactly true, and where there is disagreement the CEO often doesn't get what he asked for. The problem is that the company is too large and complex to manage, and should be broken up into more manageable businesses. Lip-Bu is trying to simply make it smaller but the complexity may remain and that could lead to as many issues as it solves.

But in the short term, everything which is thought to happen will lower cost, maybe dramatically, and that should be very good for the stock.

This is especially true if the much needed restructuring of IFS happens, eliminating most dedicated Fab positions, replacing them with centralized operation centers in OR and AZ. Many blue badges should be converted to contract workers, as that is the foundry industry norm. People are wildly overcompensated for what is at best semiskilled labor.

Spider Tan, Spider Tan, does whatever a Spider Tan does.

Yeah, I have to admit, I'm not optimistic about Tan's chances of turning things around. All the hype right now reminds me of exactly what I saw when Pat first came on board. He was the messiah that was going to save Intel. And look how that turned out. Looks like the stock gains of the past week are already getting erased. The irrational exuberance is over, now it will be a years-long slide into the grave.

He may be the last canary in the coal mine.

How long can Intel survive with LB? He might be the one to turn off the lights.

he is going to outsource the work to a much cheaper country for his 'investors'
he is a 1 trick pony
that is what he did at cadence

LBT will leave in 2 years.

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