How Intel’s Employee Morale Hit Rock Bottom While Performance Tanked

But then something started shifting, and it wasn’t pretty. The rot began creeping in during the 2000s under Paul Otellini, Intel’s first non-engineer CEO. Remember that guy who turned down Steve Jobs’ request to build chips for the first iPhone? Yeah, that decision alone probably haunts every Intel investor’s nightmares.

Intel performance started taking priority over Grove’s vision of technological leadership. The democratic culture where everyone’s voice mattered? Gradually suffocated under layers of bureaucracy and penny-pinching. Bob Swan, CEO from 2019 to 2021, might have had great vision, but employees remember him as the guy who killed even the smallest perks. We’re talking about $25-100 gift cards becoming harder to approve than nuclear launch codes.

The company that once celebrated its people as family started treating them like disposable assets. Layoffs got cute corporate names like “Corporate People Movement” (because apparently calling it what it is would be too honest?). The fear of being next became so pervasive that it literally took people’s heads out of the game.

Pat Gelsinger: A Brief Spark of Hope

When Pat Gelsinger returned in 2021, it felt like the cavalry had arrived. Here was an engineer who understood Intel’s DNA, someone who could potentially channel Grove’s ghost and resurrect the old magic. For a moment, employee morale actually ticked upward.

Gelsinger bet big on advanced manufacturing, kept employees informed through weekly addresses, and seemed genuinely committed to rebuilding Intel’s technological edge. Even when he asked for pay cuts and scaled back the beloved sabbatical program, people believed in his vision.

But then the board—apparently lacking patience for long-term thinking—booted him out in December. One former 30-year employee captured the mood perfectly: “For most of us, when [Gelsinger] was forced out, it was really hard on morale, like, we just couldn’t believe it.”

Enter Lip-Bu Tan: The Invisible CEO

Now we have Lip-Bu Tan, and boy, is this a different story. Employees describe him as “missing in action,” spotted only once at an ice cream social (presumably to soften the blow of a strict return-to-office policy). One current manager summed it up: “I haven’t seen him, even by accident. He’s invisible.”

Tan’s approach seems laser-focused on external stakeholders while internal ones get the cold shoulder. His plan to cut another 25,000 roles and emulate Nvidia’s “lean, fast-moving culture” might make investors happy, but it’s doing zero favors for employee morale.

The guy literally showed up to his first employee meeting wearing a pullover branded with his former company’s logo. Talk about reading the room—or rather, completely failing to read it.

The Morale Death Spiral

Here’s where it gets really depressing. Multiple sources describe the current mood as people working in a “heads-down, push-through situation” where “that spark in people’s eyes, the desire to do this work, was not there.”

The constant threat of layoffs, combined with leadership that seems more interested in impressing Wall Street than inspiring their workforce, has created a toxic brew of anxiety and disengagement. When your CEO is invisible and your job security depends on quarterly earnings reports, innovation tends to take a backseat to survival.

Even the recent $5 billion investment from Nvidia, which briefly lifted spirits with employees texting “Jensen likes us!” couldn’t mask the underlying cultural decay. Sure, external validation feels good for a moment, but it doesn’t fix the fundamental trust issues between leadership and staff.

The Performance Connection

Here’s what really stings: Intel performance and employee morale are locked in a vicious downward spiral. Demoralized employees don’t innovate. Companies that don’t innovate fall behind. Falling behind leads to more layoffs and cost-cutting, which further tanks morale.

Intel’s strategic missteps—missing mobile, missing AI, losing manufacturing edge—didn’t happen in a vacuum. They happened while the company was systematically dismantling the culture that made those breakthrough innovations possible in the first place.

What This Means for Intel’s Future

The brutal truth? Most top engineering graduates don’t dream of working at Intel anymore. They’re heading to companies where innovation is still valued over quarterly cost-cutting exercises. As one former senior manager put it: “Most people want to be part of a growth story, not a turnaround story, unless the turnaround has legs.”

But here’s a tiny silver lining—former Intel employees still believe in what the company could become. Many said they’d return “in a heartbeat” if leadership could recapture even a fraction of the old Grove magic.

The question isn’t whether Intel can survive financially (though that’s looking iffy). The real question is whether new leadership can rebuild a culture worth working for—one that attracts the kind of talent needed to compete in an AI-dominated future.

Right now, with employee morale scraping bottom and Intel performance struggling to impress anyone, that cultural resurrection looks about as likely as Intel beating Nvidia in the AI chip race. But stranger things have happened in Silicon Valley—though admittedly, not many.