Intel to shut down automotive unit, lay-off majority of staff
What's the story
Intel will shut down its automotive business and lay off the majority of its employees in that segment. In a message viewed by The Oregonian, the company told employees that "Intel plans to wind down the Intel architecture automotive business." The move is part of a larger restructuring strategy aimed at refocusing on core client and data center products. The company plans to honor existing commitments to customers but will let go of "most" employees working in Intel's automotive group.
Business impact
Processors used in 50 million vehicles worldwide
Intel's automotive business wasn't a major contributor to the company's overall revenue or employment. However, the company did boast that its processors are used in 50 million vehicles worldwide. These chips are designed to enable electric vehicles (EVs), provide driver information, and optimize vehicle performance. Intel also holds a majority stake in the Israeli firm Mobileye, known for its self-driving car technology. The shutdown of Intel's automotive group does not appear to have a direct impact on Mobileye's operations.
Leadership changes
Move mainly affects chip design engineers
Back in April, New CEO Lip-Bu Tan had warned employees of "several months" of layoffs due to declining sales and a bleak revenue outlook. The job cuts will mainly affect chip design engineers, cloud software architects, engineering managers, and architects. The first major move under Tan's leadership comes as Intel is reportedly shutting down its automotive chip division. The new CEO took over in March to lead a turnaround for the struggling Silicon Valley chipmaker after years of setbacks.
Transition strategy
Cuts at Intel's Santa Clara headquarters begin on July 15
The job cuts at Intel's Santa Clara headquarters are set to begin on July 15. However, the company has not revealed how many employees will be affected by this decision. In a statement to The Oregonian, Intel said it is "refocusing on our core client and data center products." The company also emphasized its commitment to ensuring a smooth transition for customers amid these changes.
Strategic shift
Intel exploring opportunities in software, robotics, and AI
Intel is also considering selling a part of its business as part of a larger strategy to realign its workforce on core businesses: chips for PCs and data centers. The company will also explore opportunities in software, robotics, and AI foundation models. In March, Tan had announced plans to consider major changes to Intel's chip manufacturing and AI strategies during a town hall meeting with employees.