Changes are already coming in leadership for the embattled Intel, with new chief exec Lip-Bu Tan taking swift action on agility and speed about culling names from a board brimful with them. Last month, Tan announced a flatter organizational structure with the removal of layers of middle management in a recent internal memo.

Such a type of leader will include leaders of Intel’s data center, AI or PC chip business units where he will directly report. But Tan hopes the change will make accountability more transparent and will also make bureaucratic delays that have repeatedly snarled innovation less frequent.

His leadership approach involves even further interaction with technical teams and faster execution of initiatives across departments. Already seen as a transformational figure, Tan used to lead Cadence Design Systems and served on Intel’s board.

Today, in this article, we will discuss the Inside Intel’s Overhaul: New Boss, New Rules, New AI Vision.

Sachin Katti Appointed as Chief Technology and AI Officer

The appointment of Sachin Katti to the role of Chief Technology and AI Officer is a crucial part of their restructuring. Now, Intel Labs, its AI strategy and partnerships with startups and developers, Katti is leading Intel’s networking chip group, which he formerly led.

Greg Lavender has recently retired, and in his place is Ted Beati. Katti has taken on this new role central to Intel’s steering of its future technologies, especially as AI becomes a dominant force in the semiconductor space.

 The decision from Intel’s CEO Tan is a sign of a serious commitment from the company to the AI sector, where it has historically been left behind by competitors such as Nvidia and AMD.

Katti’s experience in networking and data architecture should come in handy as generative AI surges in demand, and help Intel refocus and compete more aggressively. Tan’s promotion also reflects Tan’s trust in engineering expertise and the desire to stick with technical superiority.

Middle Layer Reduced, Engineering Leadership Prioritized

Though not confined to new appointments, Tan’s reorganisation is a cultural change at Intel. He brought in and elevated technical leaders that he’s elevated such that they report directly to him, keeping with his engineering first philosophy, with Rob Bruckner, Mike Hurley and Lisa Pearce, for example.. Also, Intel plans to slim down its middle management, which Tan deemed too bloated and too slow.

The purpose of these reductions is to eliminate unwanted layers that take a fruit out of the market, and is the opposite of an innovation driver or a fast product development. Under this newly reshaped structure, Michelle Johnston Holthaus will continue to hold a senior leadership position, but will be responsible for much more.

 However, Tan’s changes focus on engineers and developers who can have a direct impact on product design and performance. In general, we want to do away with Intel’s loss of historical power as a technology company, not just an organization. The idea behind this new direction is to help companies make faster pivots, and to break new ground around them in an incredibly fast pasting industry.

Reviving the Intel Foundry and Manufacturing Focus

The second trick up the sleeve of Tan’s strategy is to revive Intel’s foundry business, which makes chips for customers that don’t include Nvidia. Intel Foundry will serve as a focal point in the company’s comeback plan. The reason is that Tan wishes to re-establish Intel as a key player in the global contract chipmaking market, which TSMC currently dominates.

 It is intended to provide internal and external customers with frontiers of manufacturing capability. Tan believes that focusing on making computing affordable will help restore credibility and capture new customers as Intel’s struggles to manufacture undercut its competitiveness.

Improving foundry services and increasing performance would help Intel to regain market share and generate new sources of revenue within a business currently characterized by speed, scale, and reliability.

Altera Stake Sale: Strategic Financial Move

Intel shifts to become a financial player by selling 51 percent of its Altera programmable chip unit for $4.46 billion. The deal will also help Intel streamline its operations and raise capital for more important business segments such as AI and Foundry development.

Intel’s revenue was small in the form of Altera, a division that has been underperforming and has racked up operating losses. By spinning the unit off, Intel will be better able to concentrate attention on scalable, profitable opportunities.

The deconsolidation of Altera will also improve visibility in its earnings for shareholders, once the sale is finalized. It’s a sharp break from strategies of the past that preferred deep in-house portfolios.

Tan is willing to sell off the business to cut losses and fund future growth through strategic divestments with the ambition of building himself a leaner and more profitable Intel.