New CEO Lip-Bu Tan is transforming the chipmaker, slashing jobs and upending operations. Intel photo
Intel notified its marketing employees this week that it plans to outsource many of their jobs to the consulting firm Accenture as new CEO Lip-Bu Tan works to slash costs and improve the chipmaker’s operations.
The company said it believes Accenture, using artificial intelligence, will do a better job connecting with customers. It says it will tell most marketing employees by July 11 whether it plans to lay them off.
“The transition of our marketing and operations functions will result in significant changes to team structures, including potential headcount reductions, with only lean teams remaining,” Intel told employees in a notice describing its plans. The Oregonian/OregonLive reviewed a copy of the material.
Intel declined to say how many workers will lose their jobs or how many work in its marketing organization, which employs people at sites around the globe, including in Oregon. But it acknowledged its relationship with Accenture in a statement to The Oregonian/OregonLive.
“As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company,” Intel said. “As part of this, we are focused on modernizing our digital capabilities to serve our customers better and strengthen our brand. Accenture is a longtime partner and trusted leader in these areas and we look forward to expanding our work together.”
Hired in March, Tan is a veteran semiconductor industry executive but he’s an outsider at Intel — the company’s first CEO who had never worked there. And he appears to be radically changing how the company functions.
In April, Tan told workers to expect significant job cuts in the coming months. Details of his plans are now emerging across Intel’s various business units.
Intel notified workers in its manufacturing business last weekend that it plans to lay off as many as a fifth of them beginning in July — cuts that figure to cut several thousand jobs, at least. Tan is overhauling Intel’s operations, cutting jobs and eliminating layers of management in hopes that will accelerate the company’s innovation.
Intel told workers the move to outsource its marketing work is an extension of that work.
“While we expect that lower costs will be a natural end result of this decision, the reality is that we need to change our ‘go to market’ model to be more responsive to what customers want,” the company told marketing employees. “We have received feedback that our decision-making is too slow, our programs are too complex, and our competitors are moving faster.”
Intel is struggling to recover from years of technological setbacks, which have cost it market share in PCs and data centers and left it shut out of the booming business of advanced artificial intelligence. The company’s sales have fallen by a third in recent years, leaving Intel unprofitable and facing an uncertain outlook.
“We are partnering with Accenture to leverage AI-driven technologies with the goals of moving faster, simplifying processes and reflecting best practices, while also managing our spending,” Intel told employees in this week’s notice.
The company seemed to raise the possibility that it will ask some workers to train their replacements at Accenture, helping educate contractors on Intel’s operations “during the transition process.”
Many companies are experimenting with artificial intelligence capabilities and there is some evidence that hiring has slowed in some sectors as businesses delegate jobs historically done by people to computers. Amazon CEO Andy Jassy told employees this week that he expects artificial intelligence will reduce his company’s workforce.
Intel’s decision to outsource key marketing work represents a gamble that a contractor can excel in a key corporate function and a bet that artificial intelligence has advanced to the point where it makes many traditional roles obsolete.
“AI can help us analyze large amounts of information faster, automate routine tasks, personalize customer experiences, and make smarter business decisions,” Intel told marketing workers. “Our goal is to empower teams with more time to focus on strategic, creative and high-impact work by automating repetitive or time-consuming tasks.”
- - Mike Rogoway covers Oregon technology and the state economy. Reach him at mrogoway@oregonian.com or 503-294-7699.
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