Intel to slash factory jobs in new round of layoffs starting July, more cuts likely to follow
Intel is preparing to implement significant job cuts at its manufacturing sites beginning mid-July, marking its first major workforce reduction since Lip-Bu Tan assumed the role of Chief Executive Officer in March. The layoffs, which are expected to conclude by the end of the month, form part of a broader strategic overhaul as the company seeks to streamline operations and sharpen its competitive edge in the global semiconductor arena.An internal memo, reviewed by The Oregonian/OregonLive, confirmed the timeline for the layoffs but withheld specific details on the number of positions affected or the exact locations. According to sources familiar with the matter, individual business units have been granted autonomy in managing the reductions, provided they meet financial benchmarks established by senior leadership.The company has framed the cuts as essential to its ongoing transformation. In a statement, Intel explained, 'Removing organisational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution.' It further emphasised that these decisions were made following 'careful consideration' and pledged that employees impacted by the layoffs would be treated with 'care and respect.'The move reflects growing pressure on Intel to address persistent challenges, including falling demand in the PC and laptop sectors, eroding sales figures, and intensified competition in chip manufacturing, particularly in the artificial intelligence (AI) space. Competitors such as Nvidia and AMD have surged ahead in AI-focused hardware, a domain where analysts have repeatedly pointed to Intel's vulnerability.While this latest round of redundancies represents the first under Tan's leadership, it follows a difficult recent history for Intel's workforce. In 2023, the company slashed approximately 15,000 positions under then-CEO Pat Gelsinger, including around 3,000 jobs in Oregon alone. Despite these cuts, Intel remains Oregon's largest private-sector employer, with an estimated 20,000 staff based in Washington County.Speculation over impending layoffs has been swirling among Intel's Oregon-based employees since April, when Tan, during an investor call, alluded to possible reductions but refrained from disclosing specifics or outlining a full strategic plan. This lack of clarity has fuelled growing frustration among staff, who have voiced concerns over what they perceive as insufficient transparency from senior management.Unlike his predecessor, Tan has maintained a notably lower public profile since stepping into the CEO role. Nevertheless, he is expected to unveil a comprehensive transformation blueprint later this year. Industry watchers anticipate that this plan will prioritise strengthening Intel's manufacturing capabilities, expanding its AI footprint, and restoring investor confidence, all while positioning the firm to navigate the increasingly competitive semiconductor landscape better.As Intel embarks on this difficult phase of its restructuring, the company's long-term strategy will likely come under intense scrutiny from both employees and market analysts in the months ahead.
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