The next observe from Lip-Bu Tan was emailed to all Intel Company workers on April 24, 2025:
Staff,
As we speak we reported our Q1 2025 results. It was a step in the appropriate route as we delivered income, gross margin and EPS (earnings per share) above our steerage, pushed by Dave and Michelle’s management. I wish to thank them each, and all of you, for the great execution.
We have to construct on this progress — and it received’t be simple. We’re navigating an more and more risky and unsure macroeconomic surroundings, which is mirrored in our Q2 outlook. On high of that, there are a lot of areas the place we should enhance. We have to confront our challenges head-on and take swift actions to get again on monitor.
As I’ve stated, this begins by revamping our tradition. The suggestions I’ve obtained from our prospects and plenty of of you has been constant. We’re seen as too gradual, too complicated and too set in our methods — and we have to change.
Our flatter Govt Staff (ET) construction that I shared final week was a primary step. The subsequent step is to drive higher simplicity, velocity and collaboration throughout all the firm. To realize these aims, right this moment I’m asserting some necessary adjustments.
Turning into an Engineering-Centered Firm
We have to get again to our roots and empower our engineers. That’s why I elevated our core engineering capabilities to the ET. And lots of the adjustments we can be driving are designed to make engineers extra productive by eradicating burdensome workflows and processes that decelerate the tempo of innovation.
To make needed investments in our engineering expertise and expertise roadmaps, we have to discover new methods to scale back our prices. Whereas we’ve taken vital actions within the final yr, our present price construction remains to be properly above aggressive benchmarks. With that in thoughts, we’ve diminished our working expense and capital spending targets going ahead, which I’ll talk about throughout our investor name this afternoon.
Flattening the Group
As we refocus on engineering, we may also take away organizational complexity. Many groups are eight or extra layers deep, which creates pointless forms that slows us down. I’ve requested the ET to take a contemporary have a look at their respective orgs, with a give attention to eradicating layers, growing spans of management and empowering high performers. Our rivals are lean, quick and agile — and that’s what we should grow to be to enhance our execution.
I’ve been shocked to be taught that, in recent times, an important KPI for a lot of managers at Intel has been the dimensions of their groups. Going ahead, this won’t be the case. I’m an enormous believer within the philosophy that the perfect leaders get essentially the most performed with the fewest folks. We’ll embrace this mindset throughout the corporate, which can embrace empowering our high expertise to make choices and take higher possession of key priorities.
There is no such thing as a approach round the truth that these vital adjustments will cut back the dimensions of our workforce. As I stated once I joined, we have to make some very exhausting choices to place our firm on a stable footing for the long run. This may start in Q2 and we’ll transfer as rapidly as doable over the subsequent a number of months.
We’re going to be very intentional about the place we focus these efforts and the way we stack up towards the perfect within the trade. We’ve discovered some helpful classes from previous actions. We should stability our reductions with the necessity to retain and recruit key expertise. I’ll empower every of my leaders to make the absolute best choices aligned with our high priorities. These choices won’t be made flippantly, and we’ll hold you recurrently knowledgeable.
Streamlining Our Processes
It has been eye-opening for me to see how a lot time and power is spent on inside administrative work that doesn’t transfer our enterprise ahead. We have to radically simplify this to maximise the time spent specializing in our prospects.
I’m instructing our leaders to get rid of pointless conferences and considerably cut back the variety of assembly attendees. An excessive amount of helpful time is being wasted. We may also modernize processes with a give attention to stay dashboards and higher knowledge to make sure we’ve the real-time insights we have to make higher and sooner choices.
As well as, I’ve determined to make our formal Insights and OKR necessities non-compulsory. Whereas it’s essential for us to remain accountable for our outcomes and obtain suggestions on our efficiency, I imagine we will obtain this in an easier and extra versatile approach. Alongside the identical strains, we’ll in the reduction of on time-consuming company administrative duties corresponding to non-essential coaching and documentation.
Returning to the Workplace
Our current coverage is that our hybrid workers ought to spend roughly three days per week on website. Adherence to this coverage has been uneven at finest. I strongly imagine that our websites have to be vibrant hubs of collaboration that mirror our tradition in motion.
Once we spend time collectively in particular person, it fosters extra participating and productive dialogue and debate. It drives higher and sooner decision-making. And it strengthens our reference to colleagues.
With that in thoughts, we can be updating our coverage to require 4 days per week on website by Sept. 1. I needed to inform you properly upfront so that you’ve got time to make any changes to your each day routines. We’re going to work exhausting within the meantime to make sure websites are able to function at full capability. Your native management will share site-specific particulars and search your enter on how one can create the absolute best on-site expertise.
Constructing a New Intel
I notice this can be a lot to absorb, however we’re taking part in from behind and we have to rally as a crew to place ourselves in the absolute best place to win.
This requires us to be laser-focused on growing the perfect merchandise. We have to delight our prospects and earn their belief by delivering the efficiency, high quality and reliability they should succeed. We should display predictable execution and guarantee on-time supply. And we have to ship constant returns for our shareholders.
There are two methods groups can reply at make-or-break moments like this: They’ll have a look at the hole they should shut and quit — or they’ll look inside themselves and combat like by no means earlier than.
I made my selection final month once I determined to affix you all, and there’s no place I might moderately be proper now. I got here on board realizing full properly this could be essentially the most difficult job of my profession, but additionally essentially the most motivating and fulfilling — as a result of we’ve alternatives forward that most individuals don’t get of their careers.
I’m speaking concerning the alternative to basically reinvent an trade icon. To drag off a comeback that can be studied in enterprise colleges for generations to come back. To create new applied sciences and deploy them at scale to alter the world for the higher.
Intel was as soon as broadly seen because the world’s most progressive firm. There’s no motive we will’t get again there, as long as we drive the adjustments wanted to enhance.
It’s going to be exhausting. It would require painful choices. However we’ll make them realizing it’s what we should do to serve our prospects higher as we construct a brand new Intel for the long run – and I’ve nice confidence within the energy of our crew and our folks to make it occur.
Thanks for the whole lot you probably did in Q1. I stay up for speaking extra tomorrow throughout our All Firm Assembly.
Lip-Bu Tan