Intel, the world's largest microchip manufacturer, is starting a cost cutting initiative amid lower computer sales and declining market share.
Intel aims to be 'leaner' and 'more agile'
Strong competition has prompted chief executive Paul Otellini to announce a "top-to-bottom" review of the company.
"No stone will remain unturned," Mr Otellini said.
The US firm plans to make cuts of an estimated $1bn (£554m) by the end of this year, while revenues are tipped to fall by 3%.
As part of the biggest restructuring drive at Intel since the mid 1980s, executives will spend the next 90 days looking into businesses that are flagging and costs inefficiencies.
"You will see a leaner, more agile and more efficient Intel" said Mr Otellini.
The review, which is expected to run until the third quarter, has raised concerns about possible job losses.
"It sounds like job cuts is a piece of it and I think they are looking at whole business units, asking 'Is this efficient'?," said Credit Suisse analyst Michael Masdea.
Intel, whose business includes PC processors, memory chips, currently has a 100,000 person workforce.
Attempts to close the gap with its market rival AMD by developing more energy efficient processors has not been as successful as planned.
But news of the restructuring sparked a 3% rise in Intel shares on the US market.
In addition the firm is planning to reduce the time it assesses the basic design of its chip from every four years to every two years as well as refine its manufacturing methods.
Earlier this month, the firm said first quarter net profits fell to $1.35bn (£839m) compared with $2.18bn in the same period last year.