Intel cuts VP ranks from 450 to 200, CFO David Zinsner calls it a 'cultural problem'; says it contributed to products going through four or five...

Intel has cut the number of vice presidents at the company from about 450 at its peak to roughly 200. It has also halved its management layers from 12 to six as CEO Lip-Bu Tan tries to get the chipmaker to decide faster and ship on time. CFO David Zinsner shared the numbers at the Deutsche Bank Technology Conference, describing the old structure as a cultural problem that hurt Intel's execution for more than a decade.Zinsner said too many people across the organisation held veto power, so decisions kept stalling. The damage showed up in products. Chips often needed four or five development cycles before they were ready, when they should have reached production after the first attempt. Looking back at the last decade, he said much of Intel's trouble "can be boiled down to culture," adding that 50-person startups were getting products out faster than Intel.Intel's leadership was hearing a different story from the one on the groundTransparency was the other big issue. According to Zinsner, information changed as it moved up the management chain, and by the time presentations reached the CEO, they often described a different situation from the one teams lower down knew about.He did not frame this as deliberate deception. Some managers simply did not want to admit a project was failing. The result was that Intel's top leadership sometimes made decisions based on an inaccurate picture of the business. Tan has since brought in executives he trusts who are used to working in leaner organisations.The VP cuts sit inside a much larger downsizing. Intel had 108,900 employees at the end of 2024 and 88,400 by late September 2025, including subsidiaries like Mobileye. Around 20,500 of those exits happened under Tan, who took charge in March 2025 and told staff there would be "no more blank checks." The pitch was about flattening management, but in Oregon only 8% of the laid-off employees had "manager" in their job titles. Most were engineers and technicians.Intel says 18A yields and 14A progress show the overhaul is workingZinsner pointed to early signs of change. Several products have reached A-stepping, Intel's term for the first version of a chip, without the repeated development cycles that were once routine. Intel 18A yields are running ahead of internal milestones, and 14A defect density is tracking better than the company's target curve.Intel is now preparing for 14A risk production in 2027 and high-volume manufacturing in 2028. Internal product teams have started designing for the process, and interest from external foundry customers has picked up.Finances are moving too. Intel entered 2026 expecting gross margins in the high 30s and is now in the low 40s. The target is the mid-40s, then the high 40s, and eventually a figure starting with 5. To get there, Intel uses an internal "Rule of 45" that combines revenue growth and operating margin. Slower businesses must deliver stronger margins, while faster-growing ones can earn more investment.Halving the VP ranks gives Intel a leaner org chart, but the numbers Zinsner shared will only mean something if they hold. 14A is the first major process being developed entirely under Tan's structure, with fewer layers between engineers and the CEO and fewer people who can block a decision. If it reaches risk production in 2027 and volume manufacturing in 2028 as planned, it will be the clearest evidence yet that the cultural reset worked. If it slips into the multiple development cycles that marked the last decade, the 250 fewer vice presidents will have changed very little.You use AI every day. Now get your AI Quotient. Take the AIQ test.