However, on Thursday, Tan also highlighted that he needs to take charge of the company and that he is trying to wrest it back from what he saw as previous missteps.
“There are no more blank checks," Tan wrote in a statement for his employees. "Every investment must make economic sense. We will build what our customers need, when they need it, and earn their trust through consistent execution."
Yet, shares will go down by 4.5% in extended trading after the company forecast steeper third-quarter losses than estimated by Wall Street. Tan also told analysts during a conference call that he believes Intel’s so-called 18A manufacturing process has the ability to generate a reasonable return only if it is used for Intel’s own products. Earlier this month, Reuters also reported that Tan is debating whether to quit offering technology to external customers.
In the process of cutting jobs, the workforce is planning on cutting down 15% of the 96,400 employees. The company also plans to further reduce the headcount to 75,000 employees by the end of the year, meaning a 22% decrease in the number of employees since 2024.
Ben Bajarin, the CEO of the tech market analysts firm Creative Strategies, said, “They may have overspent on 18A ... but I think this is the painted picture of a new fiscally disciplined base that they're going to go from here. I think that's the right approach”.
More so, in the memo received by Intel’s employee, Tan also mentioned that they are looking into building more factories only if the demand for chips is there. Previously, the company has built factories ahead of demand in the US and elsewhere, reported Reuters.
Intel is now working to bring its 18A tech to high volume, as Tan reported in a memo that the company plans to take a disciplined approach to investment in the next-gen 14A manufacturing process, and in its quarterly securities filing.
