Intel cuts VP ranks from 450 to 200; CFO says ‘cultural problem’ delayed products
Intel has cut its vice president ranks from about 450 to 200 and halved management layers from 12 to six under CEO Lip-Bu Tan. CFO David Zinsner blamed a cultural problem of veto power and poor transparency for years of slow execution and delayed products. He said Intel 18A yields are ahead of schedule, 14A risk production is set for 2027, and gross margins have climbed into the low 40s.
Intel has reduced its number of vice presidents from around 450 to about 200, and halved its management layers from 12 to six under CEO Lip-Bu Tan. CFO David Zinsner attributed these changes to a cultural problem that hindered the company's execution for over a decade. The old structure allowed too many people to veto decisions, causing products to require multiple development cycles before reaching production.
Intel's leadership was previously unaware of the true situation on the ground, as information changed as it moved up the management chain. Intel has seen early signs of improvement, with products reaching A-stepping without repeated development cycles and better yield and defect density metrics. Intel is preparing for 14A risk production in 2027 and high-volume manufacturing in 2028.
The company's finances have shifted from an expected high 30s gross margin to the low 40s and a target of mid-40s, aiming for the high 40s eventually.
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