The following note from LIP-BU Tan was sent by email to all employees of the Intel corporation on April 24, 2025:
Team,
Today, we reported our results in the first quarter of 2025. It was a step in the right direction because we generated income, a raw margin and a BPA (profit by action) above our advice, drawn by the management of Dave and Michelle. I want to thank them both, and you all, for the right execution.
We have to rely on these progress – and it will not be easy. We sail in an increasingly volatile and uncertain macroeconomic environment, which is reflected in our perspectives of T2. In addition to that, there are many areas where we have to improve. We have to face our challenges head -on and take quick measures to get back on the right track.
As I said, it starts by reorganizing our culture. The comments I have received from our customers and many of you have been consistent. We are considered too slow, too complex and too much settled in our ways – and we have to change.
Our structure of the steering team (and) that I shared last week was a first step. The next step is to lead to greater simplicity, speed and collaboration throughout the business. To achieve these objectives, I announce some important changes today.
Become an engineering focused business
We have to take over our roots and empower our engineers. This is why I have raised our basic engineering functions to ET. And many of the changes we will drive are designed to make engineers more productive by removing workflows and work processes that slow down the pace of innovation.
To make necessary investments in our roadmaps of engineering talents and technologies, we must find new ways to reduce our costs. Although we have taken important measures in the past year, our current cost structure is still much higher than competitive references. In this spirit, we have reduced our operating expenses and our capital expenditure objectives in the future, which I will discuss during our investor call this afternoon.
Flatten the organization
While we will refocus on engineering, we will also delete organizational complexity. Many teams have eight or more layers, which creates an unnecessary bureaucracy that slows us down. I asked it and to take a new look at their respective organizations, emphasizing the suppression of layers, the increase in control ranges and the empowerment of the most efficient. Our competitors are skinny, fast and agile – and this is what we need to improve our execution.
I was surprised to learn that in recent years the most important KPI for many managers at Intel has been the size of their teams. In the future, this will not be the case. I am a great supporter of philosophy that the best leaders take advantage of it with the fewest people. We will adopt this state of mind through the company, which will include the improvement of our best talents to make decisions and appropriate more priorities.
There is no way to get around the fact that these critical changes will reduce the size of our workforce. As I said when I joined, we have to make very difficult decisions to put our business on a solid basis for the future. It will start in the second quarter and we will travel as quickly as possible in the coming months.
We are going to be very intentional about where we concentrate these efforts and how we are preparing for the best in industry. We have learned some precious lessons from past actions. We must balance our discounts with the need to preserve and recruit key talents. I will allow each of my leaders to make the best possible decisions aligned with our main priorities. These decisions will not be taken lightly and we will keep you regularly informed.
Rationalize our processes
It has been revealing for me to see how long and energy are devoted to internal administrative work which does not advance our business. We must radically simplify this to maximize the time spent focusing on our customers.
I ask our leaders to eliminate unnecessary meetings and considerably reduce the number of participants in the meeting. Too precious time is wasted. We will also modernize the processes by emphasizing live dashboards and the best data to make sure that we have the real -time information we need to make better and faster decisions.
In addition, I decided to make our information official and the OKR requirements optional. Although it is crucial for us to stay responsible for our results and receive comments on our performance, I think we can achieve it in a simpler and more flexible way. In the same vein, we will reduce corporate administrative tasks that take time such as non -essential training and documentation.
Back to office
Our existing policy is that our hybrid employees should spend about three days a week on site. Adherence to this policy has been at best uneven. I firmly believe that our sites must be vibrant collaboration centers that reflect our culture in action.
When we spend time together in person, this promotes a more engaging and productive discussion and debate. It causes better and faster decision -making. And that strengthens our connection with colleagues.
In that spirit, we will update our policy to demand four days a week on site by September 1. I wanted to tell you well in advance so that you have time to make adjustments to your daily routines. We will work hard in the meantime to make sure that the sites are ready to operate at full capacity. Your local leadership will share the specific details of the site and seek your opinion on how to create the best on -site experience possible.
Build a new Intel
I realize that it is a lot to take, but we play from behind and we have to rally in a team to put ourselves in the best possible position to win.
This forces us to focus on the laser to develop the best products. We must delight our customers and gain their confidence by offering the performance, quality and reliability they need to succeed. We must demonstrate a predictable execution and ensure delivery in time. And we must provide coherent yields for our shareholders.
There are two ways whose teams can respond to moments of makeup or rupture like this: they can look at the gap they need to fill and abandon-or they can look in themselves and fight like never before.
I made my choice last month when I decided to join you all, and there is no place where I prefer to be right now. I came on board knowing very well that it would be the most difficult work of my career, but also the most motivating and the most fulfilling – because we have opportunities to come that most people do not get their career.
I am talking about the opportunity to fundamentally reinvent an icon in industry. To make a return that will be studied in business schools for future generations. To create new technologies and deploy them on a large scale to change the world for the best.
Intel was once widely considered the most innovative business in the world. There is no reason why we can not return, as long as we drive the necessary changes to improve.
It will be difficult. This will require painful decisions. But we will do them knowing that this is what we have to do to better serve our customers when we build a new Intel for the future – and I have great confidence in the power of our team and our people to get there.
Thank you for everything you have done in Q1. I can’t wait to talk more about it tomorrow during our All Company meeting.
Tan lip lip
