Intel (INTC) Corp. will announce a purge of 20% of its staff as it aims to pare back bureaucracy within the company, according to a new report. That would amount to about 21,0000 jobs being eliminated.

Investors cheered the move, sending shares up over 7% in morning trading.

The layoffs are the first major actions undertaken by chip veteran Lip-Bu Tan, who took the helm as Intel’s CEO earlier this year.

With the layoffs, Tan aims to “streamline management and rebuild an engineering-driven culture,” according to Bloomberg, which first reported the news.

“As CEO, my number one priority has been spending time with customers,” Tan said at the Intel Vision 2025 conference in Las Vegas last month.

“Under my leadership, Intel will be an engineering-focused company. We will listen closely and act on your input. Most importantly, we will create products that solve your problems and drive your success,” Tan said.

But analysts need more convincing that the new CEO can effect a turnaround.

Baird analyst Ted Mortonson said on a recent podcast that “Intel is somewhat of a sinking ship right now,” noting that the legacy chipmaker is “having a lot of trouble” in its foundry business.

Mortonson also said that Intel has fallen behind in AI.

“When you talk about Gen AI, you need to be there, and Intel is not,” Mortsonon told Yahoo Finance (APO).

The chipmaker’s struggles have even caught the eye of President Donald Trump, who, according to Bloomberg, reported that Taiwanese contract manufacturer TSMC (TSM) is considering taking a controlling stake in chipmaker Intel’s factories at the request of Trump.

Trump’s team raised the idea of a deal between the two firms in recent meetings with officials from TSMC, and they were receptive, Bloomberg reported, citing a person familiar with the matter.