Intel layoffs begin: Chipmaker is cutting many jobs

Intel began laying off employees across the company Monday, notifying workers individually about whether they will keep their jobs.

New CEO Lip-Bu Tan told workers in April to expect major layoffs in the coming months as the chipmaker slashes costs and overhauls its organization after years of technical setbacks and falling sales.

The cuts are sweeping and will affect many thousands of workers in every part of the business, but Intel has declined to specify how many positions it will eliminate or how long the process will take. Many employees learned about the status of their jobs Monday, but others may have to wait weeks for decisions to be finalized.

“As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company,” Intel said in a written statement Monday, reiterating prior comments. “We are making these decisions based on careful consideration of what’s needed to position our business for the future, and we will treat people with care and respect as we complete this important work.”

Intel notified workers last month in its huge manufacturing division, known as Intel Foundry, that it plans to lay off 15% to 20% of their positions. Those cuts will affect several thousand technicians, engineers and researchers. Intel Foundry has a large presence in Oregon, where it develops each new generation of microprocessor.

Additionally, Intel plans to shut down its automotive technology business and lay off most of those workers. The company also plans to outsource its marketing to the consulting firm Accenture, which Intel hopes will save money by using artificial intelligence to operate more efficiently.

Significant layoffs will take place in other parts of Intel’s business, too, but the scope of those cuts isn’t clear. Intel notified California officials last week that it would lay off a little over 100 workers at its Silicon Valley headquarters. It hasn’t yet issued similar notices in Oregon or Arizona, the company’s two largest sites, and more layoffs may be coming in California.

Long among the world’s best-known technology companies, Intel now faces an existential crisis. It reported a $19 billion loss last year as Intel began adjusting to diminished sales and increasingly robust competition.

Intel’s stock, which traded above $50 as recently as 2023, now trades around $22 a share.

Setbacks in the company’s manufacturing business enabled rival Taiwan Semiconductor Manufacturing Co. to leapfrog Intel’s microprocessors with more powerful alternatives.

Intel has steadily lost market share to competitive chip designs from AMD and ARM Holdings. Most significantly, perhaps, Intel has no leading-edge technology for artificial intelligence — a booming market dominated by Nvidia.

Former CEO Pat Gelsinger sought to turn Intel into a contract manufacturer, like TSMC, but Intel has made little headway in that space. Gelsinger had pledged billions of dollars to build new factories in Ohio, Germany and Israel — and to upgrade factories in Oregon and New Mexico — but with Intel’s sales in prolonged decline, many of those plans are on hold.

Intel is hopeful a new generation of advanced microprocessor technology due late this year, which it calls 18A, will help shore up the market position of Intel chips for PCs and data centers. But other chip companies have shown only modest interest in hiring Intel to make their chips using 18A.

Intel eliminated 15,000 jobs across the company in a round of layoffs last summer, leaving it with about 109,000 employees around the world.

It cut about 3,000 Oregon jobs last year through layoffs, buyouts and early retirement offers. Intel remains the state’s largest corporate employer, with about 20,000 workers at its Washington County campuses.

Intel’s layoffs appear similar in scale to last year’s cuts and will have a profound effect on Oregon’s economy. The state’s semiconductor industry paid an average wage of nearly $180,000 last year, more than $100,000 above Oregon’s average across all industries.

Thousands of outside suppliers, contractors and construction personnel work to supply and maintain Intel’s Hillsboro factories, too.

Intel isn’t offering buyouts this year, but employees say severance packages are similar to those paid out with 2024’s layoffs. Last year, Intel paid laid-off workers at least 13 weeks of salary, plus 1.5 weeks of pay for each year they had worked at the company.

-- Mike Rogoway covers Oregon technology and the state economy. Reach him at [email protected] or 503-294-7699.

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