The next observe from Lip-Bu Tan was emailed to all Intel Company workers on April 24, 2025:
Crew,
At the moment we reported our Q1 2025 results. It was a step in the correct route as we delivered income, gross margin and EPS (earnings per share) above our steering, pushed by Dave and Michelle’s management. I wish to thank them each, and all of you, for the nice 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 atmosphere, which is mirrored in our Q2 outlook. On prime 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 clients and plenty of of you has been constant. We’re seen as too gradual, too advanced and too set in our methods — and we have to change.
Our flatter Government Crew (ET) construction that I shared final week was a primary step. The subsequent step is to drive higher simplicity, pace and collaboration throughout your complete firm. To attain these goals, in the present day I’m asserting some essential modifications.
Turning into an Engineering-Targeted Firm
We have to get again to our roots and empower our engineers. That’s why I elevated our core engineering features to the ET. And lots of the modifications we will likely be driving are designed to make engineers extra productive by eradicating burdensome workflows and processes that decelerate the tempo of innovation.
To make obligatory 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 effectively above aggressive benchmarks. With that in thoughts, we’ve decreased our working expense and capital spending targets going ahead, which I’ll focus on throughout our investor name this afternoon.
Flattening the Group
As we refocus on engineering, we may even 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 concentrate on eradicating layers, growing spans of management and empowering prime performers. Our rivals are lean, quick and agile — and that’s what we should turn into to enhance our execution.
I’ve been stunned to study that, lately, crucial 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 a giant believer within the philosophy that the most effective leaders get probably the most completed with the fewest individuals. We’ll embrace this mindset throughout the corporate, which can embrace empowering our prime expertise to make selections and take higher possession of key priorities.
There isn’t any method round the truth that these important modifications will cut back the dimensions of our workforce. As I stated after I joined, we have to make some very onerous selections to place our firm on a stable footing for the long run. This can start in Q2 and we are going to transfer as shortly as attainable over the following a number of months.
We’re going to be very intentional about the place we focus these efforts and the way we stack up in opposition to the most effective within the business. We have now realized some priceless classes from previous actions. We should steadiness our reductions with the necessity to retain and recruit key expertise. I’ll empower every of my leaders to make the very best selections aligned with our prime priorities. These selections won’t be made flippantly, and we are going to hold you commonly 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 clients.
I’m instructing our leaders to get rid of pointless conferences and considerably cut back the variety of assembly attendees. An excessive amount of priceless time is being wasted. We may even modernize processes with a concentrate on reside dashboards and higher knowledge to make sure we’ve the real-time insights we have to make higher and quicker selections.
As well as, I’ve determined to make our formal Insights and OKR necessities elective. 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 method. Alongside the identical strains, we are going to in the reduction of on time-consuming company administrative duties equivalent 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 web site. Adherence to this coverage has been uneven at finest. I strongly imagine that our websites should be vibrant hubs of collaboration that mirror our tradition in motion.
Once we spend time collectively in individual, it fosters extra participating and productive dialogue and debate. It drives higher and quicker decision-making. And it strengthens our reference to colleagues.
With that in thoughts, we will likely be updating our coverage to require 4 days per week on web site by Sept. 1. I wished to inform you effectively prematurely so that you’ve got time to make any changes to your day by day routines. We’re going to work onerous 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 learn how to create the very best on-site expertise.
Constructing a New Intel
I notice this can be a lot to soak up, however we’re taking part in from behind and we have to rally as a workforce to place ourselves in the very best place to win.
This requires us to be laser-focused on growing the most effective merchandise. We have to delight our clients 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 will have a look at the hole they should shut and quit — or they’ll look inside themselves and battle like by no means earlier than.
I made my selection final month after I determined to affix you all, and there’s no place I might relatively be proper now. I got here on board realizing full effectively this might be probably the most difficult job of my profession, but additionally probably 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 essentially reinvent an business icon. To tug off a comeback that will likely be studied in enterprise faculties for generations to return. To create new applied sciences and deploy them at scale to vary the world for the higher.
Intel was as soon as extensively seen because the world’s most modern firm. There’s no motive we will’t get again there, as long as we drive the modifications wanted to enhance.
It’s going to be onerous. It’s going to require painful selections. However we are going to make them realizing it’s what we should do to serve our clients higher as we construct a brand new Intel for the long run – and I’ve nice confidence within the energy of our workforce and our individuals to make it occur.
Thanks for all the pieces you probably did in Q1. I sit up for speaking extra tomorrow throughout our All Firm Assembly.
Lip-Bu Tan