The following notice from Lip-Bu Tan was emailed to all Intel Corporation workers on April 24, 2025:
Team,
Today we reported our Q1 2025 outcomes. It was a step in the precise path 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 straightforward. We are navigating an more and more unstable and unsure macroeconomic atmosphere, 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 acquired from our prospects and lots of of you has been constant. We are seen as too gradual, too advanced and too set in our methods — and we have to change.
Our flatter Executive Team (ET) construction that I shared final week was a primary step. The subsequent step is to drive higher simplicity, pace and collaboration throughout the complete firm. To obtain these targets, immediately I’m saying some necessary adjustments.
Becoming an Engineering-Focused Company
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 most of the adjustments we will probably be driving are designed to make engineers extra productive by eradicating burdensome workflows and processes that decelerate the tempo of innovation.
To make crucial investments in our engineering expertise and expertise roadmaps, we have to discover new methods to cut back our prices. While we now have taken important actions within the final yr, our present price construction continues to be effectively above aggressive benchmarks. With that in thoughts, we now have diminished our working expense and capital spending targets going ahead, which I’ll talk about throughout our investor name this afternoon.
Flattening the Organization
As we refocus on engineering, we may even take away organizational complexity. Many groups are eight or extra layers deep, which creates pointless paperwork 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 develop into 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 scale of their groups. Going ahead, this won’t be the case. I’m an enormous believer within the philosophy that the very best leaders get probably the most performed with the fewest folks. We will embrace this mindset throughout the corporate, which can embody empowering our high expertise to make choices and take higher possession of key priorities.
There is not any manner round the truth that these crucial adjustments will scale back the scale of our workforce. As I stated once I joined, we have to make some very laborious choices to place our firm on a stable footing for the long run. This will start in Q2 and we are going to transfer as shortly as potential over the following a number of months.
We are going to be very intentional about the place we focus these efforts and the way we stack up in opposition to the very best within the trade. We have discovered some worthwhile 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 very best choices aligned with our high priorities. These choices won’t be made frivolously, and we are going to preserve you commonly knowledgeable.
Streamlining Our Processes
It has been eye-opening for me to see how a lot time and power is spent on inner 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 scale back the variety of assembly attendees. Too a lot worthwhile time is being wasted. We may even modernize processes with a give attention to stay dashboards and higher information to make sure we now have the real-time insights we have to make higher and sooner choices.
In addition, I’ve determined to make our formal Insights and OKR necessities optionally available. While it’s essential for us to remain accountable for our outcomes and obtain suggestions on our efficiency, I imagine we are able to obtain this in an easier and extra versatile manner. Along the identical traces, we are going to in the reduction of on time-consuming company administrative duties corresponding to non-essential coaching and documentation.
Returning to the Office
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 greatest. I strongly imagine that our websites must be vibrant hubs of collaboration that mirror our tradition in motion.
When we spend time collectively in individual, it fosters extra partaking and productive dialogue and debate. It drives higher and sooner decision-making. And it strengthens our reference to colleagues.
With that in thoughts, we will probably 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 time to make any changes to your day by day routines. We are going to work laborious 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.
Building a New Intel
I notice this can be a lot to soak up, however we’re enjoying from behind and we have to rally as a staff to place ourselves in the very best place to win.
This requires us to be laser-focused on growing the very best merchandise. We want to thrill 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 can 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 alternative final month once I determined to affix you all, and there’s no place I might fairly be proper now. I got here on board figuring out full effectively this might be probably the most difficult job of my profession, but in addition probably the most motivating and fulfilling — as a result of we now have alternatives forward that most individuals don’t get of their careers.
I’m speaking concerning the alternative to essentially reinvent an trade icon. To pull off a comeback that will probably 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 extensively seen because the world’s most modern firm. There’s no purpose we are able to’t get again there, as long as we drive the adjustments wanted to enhance.
It’s going to be laborious. It would require painful choices. But we are going to make them figuring out 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 staff and our folks to make it occur.
Thank you for all the things you probably did in Q1. I stay up for speaking extra tomorrow throughout our All Company Meeting.
Lip-Bu Tan
