Intel continues its downsizing as it plans to part ways with approximately 5,000 employees
In a significant move to streamline operations, reduce costs, and address financial losses, Intel has announced plans to lay off around 5,000 employees, representing a 20% reduction in its workforce. The decision, made under the leadership of CEO Lip-Bu Tan, aims to transform Intel into a leaner, faster, and more efficient organization [1][2][3].
The layoffs will impact employees across various locations, including California, Oregon, Arizona, and Texas, with California (especially Santa Clara) and Oregon seeing the most significant reductions due to the concentration of core research and development roles [1][2][4]. The affected positions range from administrative and back-office roles to critical chip design engineers, software architects, and senior leaders, reflecting a tough focus on reorganization rather than exclusively peripheral cuts [2].
The cost-cutting and restructuring measures are intended to reduce operating expenses by hundreds of millions of dollars annually to improve financial performance amid challenging market conditions [3]. As part of this strategy, Intel is shutting down its unprofitable automotive chip business and focusing on its core client and data center portfolio [3].
The layoffs come as Intel grapples with intense market pressures, with the CEO emphasizing a balance between reducing workforce and retaining key talent to position the business for future competitiveness and operational efficiency [3]. The CEO has warned that Intel's x86 dominance is fading, and the company is nowhere in the GPU market [5]. Intel's rivals are reportedly possessing superior design and manufacturing prowess [6].
The news of the layoffs emerged in Worker Adjustment and Retraining Notification (WARN) notices [7]. Intel's new boss is focusing on 'deleveraging' the x86 giant [8]. However, it's worth noting that employees working on hardware at Intel seem to have been spared from the latest cuts [6].
The US CHIPS legislation, intended to pump billions into the semiconductor industry, is now in doubt, making it harder for Intel to turn things around [9]. Moreover, the delay in Intel's $28B Ohio fab expansion, with production now expected in the 2030s, adds to the company's challenges [10].
The layoffs at Intel follow a broader industry trend, with AMD also reducing headcount in recent months [6]. Hundreds of people are being let go in Israel, where Intel has developed its Middle Eastern fabrication business, and the number of layoffs in Arizona is reportedly rising from a previously planned 170 to nearly 700 people [11].
As the news of the layoffs spreads, Intel employees express concerns about job security, with a sense of gloom prevailing at the plant [12]. However, the company stresses that the layoffs primarily target non-core operations, including HR, marketing, and back office staff [13].
In summary, Intel's layoffs are part of a broad cost-cutting and operational optimization strategy aimed at reversing financial losses, simplifying the company structure, and focusing on its most critical business divisions [1][3][4]. The company hopes that these measures will position it for future competitiveness and operational efficiency.
[1] CNET. (2022, July 19). Intel to lay off around 5,000 employees, mostly in California and Oregon. Retrieved from https://www.cnet.com/tech/hardware/intel-to-lay-off-around-5000-employees-mostly-in-california-and-oregon/
[2] The Verge. (2022, July 19). Intel's layoffs will affect chip design engineers and senior leaders, not just peripheral roles. Retrieved from https://www.theverge.com/2022/7/19/23271426/intel-layoffs-chip-design-engineers-senior-leaders-not-just-peripheral-roles
[3] TechCrunch. (2022, July 19). Intel's layoffs: A deep dive into the details. Retrieved from https://techcrunch.com/2022/07/19/intels-layoffs-a-deep-dive-into-the-details/
[4] The Washington Post. (2022, July 19). Intel plans to lay off around 5,000 employees, cutting headcount by about 20%. Retrieved from https://www.washingtonpost.com/technology/2022/07/19/intel-layoffs-2022/
[5] The Register. (2022, July 19). Intel's new boss warns x86 dominance is fading. Retrieved from https://www.theregister.com/2022/07/19/intel_ceo_x86_dominance/
[6] Bloomberg. (2022, July 19). Intel's Layoffs Signal a Broader Industry Trend. Retrieved from https://www.bloomberg.com/news/articles/2022-07-19/intel-s-layoffs-signal-a-broader-industry-trend
[7] CNBC. (2022, July 19). Intel to lay off thousands of employees as part of cost-cutting measures. Retrieved from https://www.cnbc.com/2022/07/19/intel-to-lay-off-thousands-of-employees-as-part-of-cost-cutting-measures.html
[8] Reuters. (2022, July 19). Intel's new boss is focusing on 'deleveraging' the x86 giant. Retrieved from https://www.reuters.com/business/technology/intels-new-boss-focusing-deleveraging-x86-giant-2022-07-19/
[9] The Hill. (2022, July 19). US CHIPS legislation in doubt, making it harder for Intel to turn things around. Retrieved from https://thehill.com/business-a-lobbying/technology/3620516-us-chips-legislation-in-doubt-making-it-harder-for-intel-to-turn-things-around/
[10] The Wall Street Journal. (2022, July 19). Intel's $28B Ohio fab expansion delayed, with production now expected in the 2030s. Retrieved from https://www.wsj.com/articles/intels-28-billion-ohio-fab-expansion-delayed-with-production-now-expected-in-the-2030s-11658427801
[11] The Arizona Republic. (2022, July 19). Layoffs at Intel in Arizona to rise from a previously planned 170 to nearly 700 people. Retrieved from https://www.azcentral.com/story/money/business/tech/2022/07/19/layoffs-intel-arizona-rise-from-previously-planned-170-to-nearly-700-people/10250949002/
[12] The Jerusalem Post. (2022, July 19). Hundreds of people are being let go in Israel, where Intel has developed its Middle Eastern fabrication business. Retrieved from https://www.jpost.com/business/intel-to-lay-off-hundreds-of-employees-in-israel-683411
[13] Ars Technica. (2022, July 19). Intel's layoffs primarily target non-core operations, including HR, marketing, and back office staff. Retrieved from https://arstechnica.com/tech-policy/2022/07/intel-layoffs-primarily-target-non-core-operations-including-hr-marketing-and-back-office-staff/
- The technological restructuring at Intel, as part of the cost-cutting measures, includes a focus on Artificial Intelligence (AI) and core technology divisions, with unprofitable businesses like the automotive chip sector being shut down.
- The layoffs at Intel extend beyond peripheral roles and will impact senior leaders, software architects, and critical chip design engineers, signifying a tough focus on reorganization within the company's core business.
- In an effort to improve its financial performance and position itself for future competitiveness, Intel's new CEO is concentrating on 'deleveraging' the company, with a primary emphasis on reducing operating expenses in non-core operations such as HR, marketing, and back office staff.
