Over the weekend, Reuters’ Max Cherney and Milana Vinn broke the story that Intel’s management team will present a new restructuring plan to its Board next week. The plan reportedly includes further cost cuts, reductions in force, a delay of the fab in Germany and sale of FPGA-unit Altera. All of this sounds pretty terrible, but it could be worse. The plan does NOT include splitting the company in two.

We have no idea what is really going on behind the scenes at Intel, and we certainly have no hard information about who is planning what, but a few things seem very likely.

First, the company almost certainly has activist investors circling. They seem very likely to propose splitting the company in two – Products and Foundry. This is just copy and paste from Activist 101 – it makes sense in Excel but not on the ground. But the actual detail of their plan matter less at this point than the mere potential for some outside group to take action.

To fend this off, management needs to be seen to have a plan of their own. The company needs about 2 years and some big amount of money to turn itself around. For them to afford that – both the money and the time – they will need to convince the Board, and possibly shareholders that their plan has merit. We have no idea who Reuters sources are, but we would not be surprised if it is someone who had a hand in formulating the plan. Intel management needs the world to know it has a plan. And ideally, the plan is strong enough to scare away the activists.

Unfortunately, that is unlikely to be the case. The problems at Intel are big enough and high profile enough that there is effectively blood in the water. It is going to take more than the outlines of a plan to stave off an attack.

Unfortunately, it is hard to see any of this adding much value. As we noted last week (and last year), splitting Intel in two is not a good idea at this point. The two sides are too closely intertwined, pulling them apart risks killing both sides. Recall that after AMD split, it took their product side almost five years to find its footing, and Global Foundries needed almost ten years and completely fell off Moore’s Law in the process. Intel is much bigger and much more dependent on its fabs than AMD was at that point.

The worst part is that just the act of fighting off the activists is likely to cause more harm than good. We are not big fans of what we have heard of the current plan.  Beyond the obvious immense distraction this will cause for the management team, most of those actions sound very short-term minded. For instance, selling Altera to a strategic buyer would generate cash right now, but that buyer knows Intel is hosting a fire sale and will negotiate accordingly. Spinning it off next year and then gradually selling down their stake would have been a more profitable path. Delaying the plant in Germany sounds equally bad. It took a lot of work to get to this point with the German government, we can only imagine that a delay or cancelation now will have pretty serious consequences down the road. And more headcount reductions? For us, the biggest problem that Intel faces is its need to fix its internal culture, mass firings are a really bad way to bring those about.