Intel cuts VP ranks from 450 to 200 under Lip-Bu Tan
Intel has reduced its management layers from 12 to six as its new CEO seeks to speed up decision-making. CFO David Zinsner said bureaucracy and a lack of transparency contributed to Intel's execution problems over the past decade.
Intel has cut the number of vice presidents at the company from about 450 at its peak to roughly 200 as CEO Lip-Bu Tan moves to simplify the company's management structure and speed up decision-making, according to CFO David Zinsner.
Tan has also reduced the number of management layers at Intel from 12 to six, part of an effort to address what Zinsner described as a cultural problem that had contributed to slow decision-making and poor execution over the past decade.
"I think if you look back at Intel and the challenges we've had over the last decade plus, a lot of it can be boiled down to culture," Zinsner said at the Deutsche Bank Technology Conference.
Zinsner said Tan's initial focus was on changing the company's culture and management structure before turning more heavily to products and growth opportunities.
"There was a lot of veto power across that organization, so a lot of things got slowed down," he said.
The result, he said, was that Intel sometimes took too long to bring products to market. Products could go through four or five development cycles before being ready, rather than reaching production after the first attempt.
"There are lots of startups that can get products out the start," Zinsner said. "We just weren't seeing that in a company that should be executing at way better pace than anybody that's got 50 people in a shop."
Zinsner also identified transparency as a central problem in Intel's previous culture.
He said information could become significantly different as it moved through the company's management hierarchy, making it harder for senior executives to understand what was actually happening inside the business.
"A lot of people at one level knew what was going on, and by the time the PowerPoints got modified to where it was getting presented to the CEO, it was an entirely different story," Zinsner said.
Managers, he suggested, were not necessarily trying to mislead senior leadership. Some were reluctant to acknowledge problems or failures.
"I think they thought they were doing the right thing, 'Hey, I am not going to admit defeat,' or whatever," he said.
But the result was that Intel's leadership could make decisions based on information that did not accurately reflect the situation on the ground.
"It really has made a lot of difference in the organization," Zinsner said of Tan's push for greater transparency.
The cultural changes have also included bringing in executives who Tan trusts and who are accustomed to operating in leaner organizations, according to Zinsner.
Zinsner said there are already some signs that the organizational changes are affecting execution.
Intel has had multiple products reach what the company calls A-stepping, or the first version of a product, without requiring the repeated development cycles that had previously been common.
He also pointed to improvements in Intel's manufacturing process development. Intel 18A yields are progressing ahead of the company's internal milestones, while Intel 14A's defect density is tracking ahead of the target curve the company had established.
Intel is now preparing for risk production of 14A in 2027 and high-volume manufacturing in 2028.
Zinsner said the company's confidence in 14A has also increased because internal Intel customers have begun designing products for the process, while engagement with external foundry customers has increased.
The organizational changes are taking place alongside a push to improve Intel's financial performance.
Zinsner said Intel entered 2026 expecting gross margins in the high 30s but has since moved into the low 40s.
"We are now kind of comfortably in the 40s in gross margins," he said.
The company's longer-term objective is to move into the mid-40s and eventually the high 40s, with a goal of reaching a gross margin beginning with a 5.
Zinsner said Intel has also adopted an internal framework called the "Rule of 45," which combines revenue growth and operating margin.
Under the approach, slower-growing businesses are expected to produce stronger margins, while faster-growing businesses can justify greater investment if they generate sufficient growth.
The framework is intended to give Intel's individual businesses clearer financial targets while allowing management to allocate resources according to growth opportunities.
