Report: Intel to Lay Off 20% of Factory Workers in Massive Cutback

Intel reportedly plans to lay off up to twenty percect of its factory workers, an enormous cutback that will have a profound effect on one of the chipmaker’s core businesses.

OregonLive reports that Intel, the world’s largest chipmaker, is gearing up for a significant reduction in its workforce, with plans to lay off between 15 percent and 20 percent of its factory workers. The announcement, made by Intel manufacturing Vice President Naga Chandrasekaran in a memo to employees on Saturday, underscores the company’s need to address affordability challenges and its current financial position.

The layoffs, slated to take place primarily in July, will impact Intel’s factories around the world, with Oregon, the heart of the company’s manufacturing operation, potentially facing the most significant effects. Intel employs 20,000 people in Oregon, more than any other business in the state.

The cuts come on the heels of a difficult period for Intel, which has been grappling with a protracted decline in sales and a bleak near-term outlook. The company has faced intense competition in the PC and data center markets, as well as its failure to develop advanced chips for the rapidly growing artificial intelligence sector.

Breitbart News reported at the end of 2024 that the company dumped CEO Pat Gelsinger after its turnaround efforts lagged behind plans:

Intel CEO Pat Gelsinger has been ousted from his position after the board lost confidence in his plans to revitalize the iconic chipmaker. The decision came to light following a meeting last week between Gelsinger and the board, where they discussed the company’s progress in regaining market share and closing the gap with rival Nvidia.

According to sources familiar with the matter, Gelsinger was presented with two options: retire or be removed. He ultimately chose to announce the end of his tenure at Intel. The company has appointed Chief Financial Officer David Zinsner and Executive Vice President Michelle Johnston Holthaus as interim co-CEOs while the board searches for Gelsinger’s permanent replacement.

Last year, Intel eliminated 15,000 jobs across the company, including 3,000 in Oregon, through a combination of layoffs, buyouts, early retirement offers, and attrition. However, this time, the company has indicated that it does not plan to offer voluntary buyouts. Instead, it will base its decisions on investment priorities and individual performance.

The layoffs will affect a wide range of positions within Intel’s Foundry business, from technicians on the factory floor to specialized researchers working on future generations of microprocessors. While the exact number of jobs to be eliminated remains unclear, the scale of the cuts suggests that several thousand, and possibly more than 10,000, positions could be at risk.

Intel’s new CEO, Lip-Bu Tan, has emphasized the need to streamline the company’s operations, reduce layers of management, and move faster to deploy new technologies. Simultaneously, Tan has expressed a desire to retain and recruit top-flight engineers, creating a challenging balancing act as the company seeks to persuade current and former employees of its bright future while making dramatic cuts to its operations.

The layoffs come at a time when Intel has received significant federal and state subsidies to support new or expanded factories in Oregon, Arizona, New Mexico, and Ohio. The Biden administration awarded Intel $7.9 billion in federal subsidies, with $1 billion already received from the CHIPS Act last year. However, much of the remaining funds appear to be in limbo as the Trump administration re-evaluates the awards.

Oregon also awarded Intel $115 million in state funds, but the timing of a planned expansion to its D1X research factory in Hillsboro remains unclear. The state funds are subject to clawback if the expansion fails to hit hiring targets or boost state tax revenue.