Intel CEO Letter to Employees

Remember that executives answer to the board of directors. The board's job is to make sure execs do things that make the company money, or in practical terms, "things the board thinks will make the company money".

A sensible, sober CEO would still need a lot of political capital to push back against a boardroom that's hounding them to jump on the latest hype train. You certainly won't get that from a CEO who just took that position a few months ago.

A sensible, sober boardroom that doesn't push their execs to jump on the hype train would need to answer to angry shareholders. It's almost certain that >50% will support the latest fad and would vote out a board that they perceive as being behind the times.

That's where startups and privately owned companies get their natural advantage of being able to go against the grain.

> why do all these business leaders all do the same things at the same time? E.g. Layoffs + micromanagement + cost focus etc... Is this truly about macroeconomic forces that every business is responding to? Or is it just following the latest fad?

I thought about this a lot over the years.

I saw something that piqued my interest last year though, and kind've helped connect the dots. I was on a cruise, and most of the ship was available to guests. One day, one room was cordoned off to an invite-only meeting. The windows weren't blocked, but on the screen was a presentation about AI investments, number of jobs saved (reduced), and etc.

I found one of the attendants later during the voyage and chatted her up. She was head of HR in some big company, and the meeting was supposed to be private. But it contained a lot more than just spreadsheets about AI investments. There was homework and whatnot, but the attendees weren't all from a single company. It was "direction setting". I don't think it was Intel (topic under discussion) but certainly some loosely related tech industry.

I'm convinced that it was nothing less than business collusion.

So, back to your question:

> why do all these business leaders all do the same things at the same time?

Because they're told to.

Intel’s situation in 2025 is not comparable to the rest of big tech. They have lost technical leadership, bled market share, and started losing a ton of money in a hugely capital-intensive business. They are actually in need of major triage to survive, not just hopping on a belt-tightening trend among still-massively-profitable software companies.

It's almost as if CEOs aren't really that smart or creative, got to their position through mostly politics, and look externally for clues about what to do.

> There seems to be significant opportunity to zig as others zag. Imagine the Intel letter saying "we are going to take advantage of the current hiring environment to scoop up talent, and push forward on initiatives."

I've pitched that a couple times in my career. The difficulty is that, in a lot of cases, your future business prospects are genuinely correlated with other businesses. Intel is going to sell fewer CPUs in the next 3 years if other businesses aren't hiring and expanding as quickly as they did during COVID. And I think there's a pretty good reason to think that Intel's revenues will actually shrink as a result. That limits how much zig they can do while others zag.

It sounds cliche at this point. It is the focus on the next quarter, next year at best that drives a lot of this due to appeasing the great god of the shareholders.

I think they should do what you say but shareholders are looking for the quickest, best returns now, not in a few years time.

You only need to look at board membership overlap between all companies (all companies, not just tech)

You'll find the same names appearing over and over again.

The reason all companies seem to do the same thing at the same time is that their boards are all the same people giving the same order to all their companies' ceo's at the same time.

There are CEOs and there are CEOs. My hunch is, most of them are just managers pushed out by investors, who have interests in multiple companies, maybe even multiple industries. That’s why they coordinated so easily.

But there are CEOs who define an industry. Those are not easily swayed by big capital.

For counter argument sake, if a highly regarded company says: “we’re going in a hiring spree”, all of that available talent adds 50% to their comp ask.

Broadly speaking though, I think you’re experiencing confirmation bias to some degree. If you only look at companies that are on the struggle bus, then you only see a limited number of levers that management has (RIF, delay CapEx, etc). Other struggling companies that don’t take evasive maneuvers go out of business and we don’t hear the story.

Many times it's a "watershed" moment.

Most of these businesses are feeling the same pressures and experiencing the same problems... in silence. Eventually one of their competitors breaks (because they are forced to due to economic realities, etc) and starts making necessary moves (layoffs, efficiency improvements, etc). The rest follow-suit, breathing a collective sigh of relief that they weren't the first to make all the headlines.

Same as it ever was except they learned not to write it down lol https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

The reason is always a secret coalition with a cool hand sign like the Illuminati.

But speaking of combining forces, Microsoft will be more likely to pick them up in a fire sale now, which I think would be best for all involved. Then you’re a couple of M&As away with first Dell and then Oracle.

Then they will select a champion to fight the Pentavirate at The Meadows!!

It's not about fads. It's just collusion.

American markets have largely consolidated into oligopolies, where just a handful of very large companies operate. It's extremely easy for them to wink at each other and then raise prices/layoff workers, etc.

This is also being accelerated by the unregulated software market that lets the corporations hide behind algorithms, as we recently saw with realty. https://www.npr.org/2024/08/23/nx-s1-5087586/realpage-rent-l...

The end of ZIRP was the bat signal to corporate America to begin layoffs.

> why do all these business leaders all do the same

Simple. These companies need enough 'fitness' in order to survive and thrive. No one has the power to fight against the Nature’s Wille—survival of the fittest. They have to obey, especially when faced with the ruthless, life-and-death competition of the commercial world.

P.S. Hoping this comment doesn’t get downvoted too much and end up dead, not surviving.

Because they're trying to make Number Go Up(TM) not run a business. Wall Street ruins everything.

> The strangest part to me about the current trends: why do all these business leaders all do the same things at the same time?

Because they all studied the same MBA programs.

> Intel headcount in 2022 was 131,900.

Not sure if you intentionally picked the all time high headcount, but you did.

Intel's headcount was relatively stable between 100-110k people between 2014 and 2021 [0]. So, getting down to 75k is definitely still a major reduction, but 2022 was also an outlier. A lot of companies overhired during Covid, and Intel particularly was the beneficiary of WFH pulling in a lot of corporate spending on laptops etc.

[0] https://morethanmoore.substack.com/p/intel-2025-q1-financial...

It's honestly impressive. Even during the major tech cuts of 2022-2023, I think many companies ended up about the same size or a even little larger over the course of a year, due to all the other hiring happening and the fact that the cuts may have partially overlapped with existing performance management anyway. 43% an incredible shrinkage for any company in such a short timescale.

I hope that pun is intentional.

It worked for Twitter, very well from an IT point of view.

I mean hiring a lot over years did not make things any better so why not try the reverse.

It wouldn't be the first time an Intel CEO resorted to prayer[1] as their business implodes.

1: https://www.threads.com/@masiosare/post/C-SoS6qJbU6?hl=en

You're missing the point. Sure, they're going to just keep doing what they've always done, but this time they're going to do it HARDER and with 15% fewer people!

The beatings will continue until morale improves. Layoffs and Return to Office!

Imagine doing what all your competitors are doing while being one of the least desirable big tech companies to work for.

What could possibly go wrong? /s

That would suck.

I bought INTC to hold for 10-20 years based on the promise of long term investment in domestic manufacturing. I didn't care if they took a decade to battle back. Seeing them sell of the foundry business would be enough for me to cut my losses before the titanic hits the ocean floor. They'd be a walking corpse at that point IMO.

To Nvidia?

They are saying SMT for data center. There are no heterogeneous Intel CPUs for that market, right?

Either way, Intel needs to get their new fabs sorted out and improve their products. There will be money to be made if Intel can get back the energy efficiency crown. The GPU division are starting to actually enter the lower market segment, but drivers leave a lot to be desired. Reducing work force even more just tells me they have no clue how to fix these issues and are grasping hard.

My company is increasing the manager headcount greatly! I suspect it's related to changing to a CTO from USA instead of one from EU.

I don't even know who my boss actually is now.

It is not the layers of management that is the problem, it is the quality of management. While great engineers mind their own business and deliver great products, the people that are not great engineers manage their way into management. They are more and more incompetent and corrupt and this is killing the companies, slowly or not that slow. So it is incompetent and corrupt management, not too much management.

About 70 years ago, C Northcote Parkinson (of Parkinson's Law fame) wrote an essay on "injellitance" that you might enjoy.

It's one reason why founders matter so much and why founder led companies often have better outcomes.

Intel is in trouble, it's not clear how or if they'll be able to get out of the hole they're in. Their only saving grace is natsec concerns and even that may not be enough to save them. I was hoping Gelsinger would be able to do it, but it was too late.

The letter says

> we plan to end the year with a global workforce of about 75,000 employees as a result of workforce reductions and attrition

so it looks like the explicit reduction might be lower, but accounting for people leaving on their own, the final amount of employees should be ~75k

"attrition" is in the plan :)

What competitive advantage does Intel have with either of those? ARM winning would be a catastrophe for Intel, and RISC-V would only be slightly better.

But the main reason to focus on x86 is that it has 47 years of existing software built for it, and with the high end mostly still on it, more gets made every day.

AMD is making money on x86 servers. Is anyone making money doing commodity (i.e. not captive) ARM / R5 server chips for sale? Ampere is losing money and hoping for acquisition.

There's none.

RISC-V is inevitable.

Intel will simply miss the train, and go under.

Unlike Intel, AMD isn't clueless. After Zen6, it will likely release good RISC-V chips with some sort of x86 acceleration for unprivileged code as selling point, remaining relevant and securing themselves market share during the (inevitable) transition.

$$$+patents

I feel like one of the under-appreciated problems with modern society (1) is the sheer quantity of lies we are surrounded with. RTO is just the current most blatant example ('this will make you more productive/more efficient/more creative' whatever) in the American economy of people saying lies knowing that they will never be held to account for those lies. All of these lies together are corrupting and destroying civil society, destroying the sense of trust necessary for people to work together, to respect and trust institutions, and to build a better world.

As the excellent series Chernobyl put it (in the words crafted by a writer, not an actual scientist) "Every lie we tell incurs a debt to the truth" and at some point someone is going to have to pay all of those debts.

1: Here I'm focusing on Anglosphere/largely US and UK societies, as a monolingual American that's all I can effectively comment on.

The other day I came to the office to join a Google Meet meeting. Another person near me was also in it, with their laptop speaker on. I'm hearing my headphones and their speaker, plus also them acoustically when it's their turn to speak. So I picked up my laptop and buggered off to a small meeting room where I closed the door and sat alone.

My favorite part about working hybrid is that no matter what, nobody meets in person, except the managers once a week, everything else is a Teams meeting at your desk.

If one would be skeptical about leadership, one might assume that this is a forcing function for people to quit ahead of the layoffs.. :)

I know a place doing RTO where most teams are at least 50% contractors from Central and South America. You can imagine how productive the office might be for those people, given that everyone is on zoom all day, and there's a whole 4 meeting rooms in a floor with 50 people.

TBF it can also be Google Meet and MS Team ones…

I’ve not ever had to experience that particular management style, but I think it’s the one where they don’t give a rat’s ass about their employees or unique thought.

I’d also hoped that some major semiconductor company would NOT embrace AI, just so they could differentiate themselves: “Our shit may be too slow for the Terminator to use, but it was designed by and for humans to use as air-gapped spreadsheet running machines with USB-key sneakernet email.”

Given that there is a growing backlash towards LLMs by the general public (not just one writers’ guild), that might sell some stock.

Has anyone backtested a stock bot that just shorts every company doing RTO? It's clearly a leading indicator for company collapse.

This sounds like reassurance that they aren't chasing last year's trends. On a technical level I don't know of any difference between inference and agentic inference.

Wanting to be Nvidia is fairly understandable.

Oh, I don't know. Maybe build chips that do things 10x more efficiently and sell them a lower cost to compete?

It _is_ a hype bubble but it is also an S-curve. Intel has missed the AI boat so far, if they are trying to catch up, I would encourage them to try. Building marginally better x86 chips might not cut it anymore.

Intel makes a lot of software. In addition to internal tools, they try to make things go faster on their chips (e.g. the Intel C++ compiler), and try to accelerate new areas of software so people will need more chips (this focus varies over time, of course).

Isn't hardware software-designed though?

focusing its chip + software designs on inference and running ai agents, not on training models

software tools are essential to driving chip adoption; it's one reason why Nvidia got ahead (CUDA)

Inference / Agentic AI implies "running models performantly using CPU cores" most likely (maybe with some optimizations / special AVX512 stuff) -- so essentially "welp, no sense in trying to build GPU's, we are too far behind nvidia to catch up".

For the same reason Kodak presented KodakCoin... The stock price boost of joining the herd.

Are you suggesting that agentic AI is only used to write software?

Will be answered by the ASI - soon. /s

But to be serious: Intel creates software too (compilers for example). Nvidia does provide software too. Its also nice to sell licenses.

They were planning to receive $1.8bn of aid from Poland[0], not sure how much they actually received

[0] https://www.gov.pl/web/cyfryzacja/inwestycja-intela-w-polsce...

I for one would welcome our new AI overlords a bit more if C-suite jobs were the get first ones LLM'd into obsolescence.

A friend of mine recently quit his job because the CEO insisted on personally reviewing and approving designs. The thing is, as a CEO, he was super busy with other CEO stuff, so my friend could only get small time slots, like 5 to 15 minutes every few days.

Each time, the CEO would give tons of small, random suggestions, then disappear for several days before reviewing again. He'd request more tweaks, then repeat the cycle. Because of all this back and forth, even simple tasks that should've taken a couple of days ended up dragging on for a month.

In the end, my friend got so frustrated with the whole process that he just quit.

But also somehow

> We will become a faster, more agile and more vibrant company. We will eliminate bureaucracy and empower engineers to innovate with greater speed and focus.

It really is a weird PR piece rather than serious communication.

We're surely no more than 18 months away from the world's first 4nm micromanagement processor!

Is that something a CEO of a massive company like Intel actually has the time to do in an impactful way? I'm no chip designer but a major chip design sounds incredibly complex and would require a tremendous amount of time & effort to review meaningfully.

Apple worked that way; maybe it still does. If a product wasn't important enough for Steve Jobs to review it then they simply didn't develop that product.

“Major” feels like a weasel word allowing for any level of review.

Given the number of “major” chips Intel produces-weren’t they already being presented to the C-Suite? What stealth chips were being sold without high level involvement?

This guy gave up his engineering degree for business administration. Actually that sounds like what Intel is.

I wouldn't be thrilled about AMD having a de facto monopoly on x86 production through.

Granted, ISA is less crucial than it used to be, but there's still a lot of x86 binaries in the world.

I'm assuming they look at the org chart, measure the max depth from the CEO to the lowliest employee, and cut that number by half. It's actually the least worse thing in this letter.

Four layers instead of eight? A large company could easily have IC -> manager -> senior manager -> director -> VP -> SVP -> CxO. Maybe Intel was even worse.

My understanding is that say the average employee had 6 levels of management up to CEO before, now they have 4

Nothing, really

For those employed, the word "streamlining" is never good.

I've worked under their leadership. Toxic does not begin to describe it. I'm not surprised at all they are in this state.

Jack Welch thought strikes again

The federal government won't let Intel fail.

That's an interesting way to look at it.

Aren't layoffs a version of that? Are we seeing any evidence that folks who have been let go from Intel have resulted in spin-offs and startups?

I know at least one person who went to work at Nvidia from Intel but that is neither of those things.

already started happening in Oregon, which will probably be hit the hardest.

They've already spun off their RealSense camera/sensor product line.

It'll never happen. It's the standard US playbook:

- Allow industry to consolidate to a tiny group of winners, or just one winner

- Turn a blind eye to anticompetitive behavior in the marketplace

- Protect the uncompetitive winner from innovative global competitors

- Bail it out because national security depends on it

It's funny because we don't have socialism, government doesn't 'own' heavy industries, but at the same time the major firms will obviously never be allowed to fail on national security grounds.

That's not really what got Intel into deep shit. They got where they are now by ignoring the main business, and spending giga$ on every trend they could stumble headfirst onto. The money returned to the shareholders was reasonable, all the written down acquisitions and failed product lines were not.

So far as the firings concentrate on all the ancillary stuff that Intel shouldn't have gotten into in the first place, it's positive.

Anybody worth shit has already left for the RISC-V startups.

> (1) Acquiring at least one or two AI chip technology startups. (Lightmatter, Cerebrus, etc)

Intel spent $2B on Habana and it went nowhere. Too bad, the hardware seemed promising enough.

> bail them out again.

when did they get bailed out before? And don't say CHIPS because Intel only actually received $2B to build fabs - and that's only a tenth of the cost of building its new fab in Ohio. That's not a bailout.