Intel Reshapes Its Core: Engineering Leadership Overhaul and Layoffs Mark a Bold Reset

A New Direction Amid Fierce Industry Pressures

Intel, once the undisputed titan of semiconductor innovation, is undergoing a radical transformation under the leadership of its newly appointed CEO, Lip-Bu Tan. As the company faces mounting competition from Asian chipmakers and grapples with internal inefficiencies, Tan is initiating a top-down restructuring aimed at restoring engineering dominance, streamlining decision-making, and redefining Intel’s role in a rapidly evolving tech landscape dominated by AI and custom silicon.

The latest move in this strategic reset includes the hiring of three heavyweight engineering executives—Srinivasan Iusdgar, Jean-Didier Allegrucci, and Shailendra Desai—each bringing a pedigree of high-impact innovation from industry giants like Cadence, Rain AI, and Google. But the shake-up doesn’t stop at leadership. Intel is also preparing for painful cost-cutting measures, including laying off up to 20% of its global manufacturing workforce, with significant impacts expected in Israel.

These changes mark a defining moment for Intel, as it sheds legacy habits and doubles down on performance, AI capabilities, and customer-centric engineering to recapture lost ground.

Intel’s Strategic Overhaul: Key Changes

In a bold restructuring move under CEO Lip-Bu Tan, Intel has recruited three seasoned engineering leaders to drive innovation and operational refinement. Srinivasan Iusdgar, formerly of Cadence, will head Intel’s new customer engineering center, reporting directly to Tan. Jean-Didier Allegrucci from Rain AI and Shailendra Desai from Google will spearhead development of Intel’s next-generation AI chips, operating under Chief Technology and AI Officer Sachin Katti.

This leadership refresh is part of a wider cultural and organizational shift that began when Tan took over in March. The CEO is pushing for a leaner structure with greater accountability, reducing layers of bureaucracy and placing renewed emphasis on technical performance and customer engagement. Notably, long-time Intel executive Greg Ernst has been appointed Chief Revenue Officer, joining other key teams now reporting directly to Tan.

The restructuring coincides with cost-reduction efforts, including a massive workforce downsizing across Intel’s global factories. Between 15% and 20% of employees in the foundry division will be affected, many of them at the Kiryat Gat facility in Israel, which currently employs around 4,000 people. The cuts, which stem from both financial constraints and strategic realignment, are set to begin in July.

Intel’s board of directors is also undergoing a shakeup, with three members not returning for the 2025 annual meeting—a move interpreted as part of Tan’s effort to strengthen technical depth and chip-specific knowledge at the board level.

In summary, the company is making dramatic changes to regain its competitive edge. Leadership is being consolidated, engineering talent refreshed, and financials rebalanced—setting the stage for a potentially dramatic turnaround.

What Undercode Say:

Intel’s move is not just about survival—it’s about repositioning itself at the center of an industry it once dominated. The appointment of Lip-Bu Tan, with deep roots in the semiconductor investment and EDA worlds, signals a return to Intel’s engineering-first roots. His leadership style—flat, fast, and focused—stands in sharp contrast to the slow-moving, siloed structure that plagued Intel in recent years.

Bringing in leaders from Cadence, Rain AI, and Google is no coincidence. It’s a calculated strike to fuse three essential domains: EDA tool expertise, next-gen AI acceleration, and hyperscaler-level system design. Iusdgar’s role in customer engineering is especially telling—it implies Intel isn’t just building chips anymore, but experiences and tailored solutions for hyperscalers, enterprises, and AI innovators.

However, this renewal comes at a human cost. Layoffs, especially those as deep as 20%, will destabilize parts of Intel’s operational core. The Kiryat Gat plant is not just another facility—it’s a symbol of Intel’s global fabrication identity. Cutting deeply into that workforce risks short-term execution hiccups and long-term morale impacts.

What remains to be seen is whether Intel can successfully execute its AI chip roadmap while cutting headcount and restructuring in parallel. Historically, companies struggle to build aggressively while simultaneously shrinking. But Tan appears to be betting that new leadership and accountability can offset the turbulence.

The board shakeup is another signal that Tan is unafraid to challenge Intel’s legacy DNA. Letting go of three board members suggests a push to inject fresh thinking—likely with more understanding of AI, software-defined silicon, and customer-centric design.

Intel’s turnaround won’t be overnight. But the ingredients—visionary leadership, top engineering hires, sharper strategic clarity—are beginning to align. If Tan can manage the cultural transformation as deftly as he’s executing the organizational reset, Intel might not just catch up to rivals like TSMC and NVIDIA—it could outmaneuver them in the longer race for AI-centric compute dominance.

🔍 Fact Checker Results:

✅ The layoffs affecting 15–20% of Intel’s foundry division were confirmed by internal memos and are expected to hit in July.
✅ Lip-Bu Tan officially took over as CEO in March 2025 and began streamlining leadership immediately.
✅ New executive hires—Iusdgar, Allegrucci, and Desai—have verified backgrounds at Cadence, Rain AI, and Google.

📊 Prediction:

If Intel succeeds in integrating its new engineering leadership and delivers a competitive AI chip platform within the next 18 months, it could regain footing in data center and edge AI markets. However, if execution falters—especially amid layoffs—the company risks deepening the talent exodus and falling further behind NVIDIA and AMD. Expect 2026 to be a make-or-break year, with investor sentiment hinging heavily on Intel’s AI roadmap performance and operational resilience.

References:

Reported By: calcalistechcom_44c9a0ecd494d7342e4b04ab
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