Intel plans 4,000 job cuts across US, Oregon hit hardest
What's the story
Intel will lay off nearly 4,000 employees across the US, including California, Arizona, and Texas. The company has now disclosed that it will cut nearly 2,400 jobs in Oregon alone. This is almost five times more than the initial figure released earlier this week. The job cuts are part of restructuring under new CEO Lip-Bu Tan and are among the largest in Oregon's history.
Market challenges
'We're not in the top 10 semiconductor companies': CEO
Once a dominant player in the semiconductor industry, Intel has struggled with declining sales and fierce competition. Tan acknowledged this during a recent address to employees, saying, "Twenty, 30 years ago, we were really the leader." He further added that "now...we are not in the top 10 semiconductor companies." These comments highlight the urgency behind his efforts to streamline operations and cut costs at Intel.
Impact on Oregon
Oregon to be hit hardest by layoffs
Oregon, where Intel operates its largest campus and employs over 20,000 people before this latest round of cuts, will be hit hardest by the layoffs. More than 1,500 jobs will be lost at the company's Ronler Acres site in Hillsboro alone. The state's economy is already under strain, and these job losses are likely to further depress consumer spending and reduce state tax revenues.
Strategic shift
Intel's decline has been gradual
Intel's decline has been gradual, losing its crown to Taiwan Semiconductor Manufacturing Company (TSMC) over the last decade. Its failure to break into the artificial intelligence (AI) training chip market, now dominated by NVIDIA, has further exposed its vulnerabilities. Tan has admitted that Intel is too late to compete in this space and must pivot toward adjacent AI technologies.
Layoff details
Layoffs across other divisions
Most of the laid-off Intel employees will get 13 weeks' pay, plus additional compensation based on their tenure. They will also get a year of health coverage. As part of its restructuring efforts, Intel is also cutting one in five jobs in its Foundry division, which handles manufacturing and R&D. This comes as the company exits automotive chips and outsources its marketing to Accenture.