Tech giant Intel is set to lay off more than 21,000 employees, accounting for over 20% of its global workforce. The move marks a significant step in new CEO Lip-Bu Tan’s strategy to overhaul the company, focusing on an engineering-driven culture and sweeping organizational reforms aimed at revitalizing the chipmaker.

The drastic layoffs come in response to several challenges facing the company, including rising operational costs, narrowing profit margins in the PC and data center markets, and the high cost of transitioning to AI chip production—a sector where Intel trails competitors like Nvidia.

This round of layoffs follows a previous 15% workforce reduction announced in August 2024 as part of a $10 billion cost-cutting initiative. As of the end of 2024, Intel employed approximately 108,900 people. The upcoming job cuts are expected to affect a range of departments, including sales, marketing, and administrative roles, as the company seeks to streamline operations and eliminate bureaucratic inefficiencies.

Intel is expected to release its first-quarter financial results soon, which may offer more insight into the financial implications and future direction of the company amid these sweeping changes.