Intel's newly appointed CEO, Lip-Bu Tan, is preparing a major overhaul of the company's chip design and manufacturing operations, including plans for further job cuts, according to sources familiar with the matter.

In his first company-wide meeting after taking the helm, Tan told employees that Intel must make "tough decisions" to reclaim its position in the semiconductor industry. A key priority is revamping Intel's manufacturing business, which traditionally focused on producing its own chips but has recently pivoted to manufacturing semiconductors for external clients like NVIDIA.

Tan, formerly CEO of chip design software giant Cadence and a seasoned tech investor, also served on Intel's board until August 2024. He now inherits a company burdened by a decade of missteps under three different CEOs — a period marked by Intel's failure to break into smartphone chips and missing the AI processor surge, leaving competitors like Arm Holdings and NVIDIA to dominate the market.

Sources indicate that Tan's near-term goal is to aggressively attract new clients to boost Intel's foundry business, which currently manufactures chips for major players like Microsoft and Amazon. Additionally, Intel plans to restart its AI server chip production and expand into new areas such as software, robotics, and foundational AI models.

In a statement, an Intel spokesperson noted, "Lip-Bu Tan is committed to spending significant time listening to customers, partners, and employees, working closely with our leadership team to position Intel for future success."

CEO Compensation Package Unveiled

Alongside his restructuring strategy, Intel disclosed Tan's compensation package, which reflects the high stakes of his leadership. He will receive a base salary of $1 million, paired with a performance bonus set at 200% of his salary.

Tan will also secure $14.4 million in long-term equity grants and $17 million in performance-based Intel stock rewards, both vesting over five years. Additionally, he will receive $9.6 million in stock options and a $25 million new hire equity grant.

As Intel faces mounting pressure to reclaim market leadership, all eyes will be on Lip-Bu Tan to see whether his bold restructuring and aggressive client strategy can steer the company back to the top of the semiconductor industry.