Chipmaking giant Intel is preparing to lay off more than 20% of its global workforce this week as part of a sweeping effort to streamline operations and reduce bureaucratic bottlenecks, Bloomberg News reported Tuesday.

The cuts mark the first significant move under new CEO Lip-Bu Tan, who took the helm last month with a mandate to revive the struggling Silicon Valley firm. Intel, which ended 2024 with nearly 109,000 employees, is seeking to slash costs and pivot toward a leaner, engineering-focused culture.

According to the report, the layoffs are intended to dismantle what Tan has described as an overly complex and sluggish management structure. During a recent company town hall, Tan warned staff that “tough decisions” were imminent as Intel repositions itself in the face of intensifying competition and internal inefficiencies.

The job reductions follow an earlier round of cuts in August 2024, when Intel announced plans to eliminate roughly 15% of its workforce—around 15,000 positions—as part of a $10 billion cost-saving plan.

Intel has faced mounting pressure amid falling profit margins in its core PC and data center businesses, along with an expensive and delayed push into artificial intelligence chips, where it continues to lag behind rivals like Nvidia.

In recent weeks, Tan has begun flattening Intel’s corporate structure, with major chip divisions now reporting directly to him—a move intended to speed up decision-making and innovation.

The company is expected to disclose more details when it reports its first-quarter earnings on Thursday.