Intel (INTC, Financial) is advancing its global restructuring plan, following an earlier announcement to cut 20,000 jobs worldwide, which is 20% of its workforce. The company has started its first round of layoffs in its Oregon facilities, affecting 529 positions, and has also cut 107 jobs at its Santa Clara headquarters. This marks the third major workforce adjustment under CEO Lip-Bu Tan, focusing on a strategy of "technology-centric streamlining."
Oregon, Intel's largest production base with about 20,000 employees, is expected to be significantly impacted. A company memo indicates that 15%-20% of jobs in 15 wafer plants across 10 countries will be cut, affecting over 10,000 employees without severance compensation. This move is in response to "unprecedented financial pressure," as reported by Intel's manufacturing VP, Naga Chandrasekaran. The company's Q1 2025 revenue fell 0.9% year-over-year to $12.833 billion, with net losses widening to $1.61 billion.
Intel's struggles are exacerbated by shifts in the semiconductor industry, where global sales are projected to reach $697 billion by 2025. Intel lags in AI computing, losing market share to competitors like TSMC and AMD, the latter seeing a 57% growth in its data center business. Intel's inefficiencies have led to a suspension of $7.9 billion in subsidies from the CHIPS Act, and export controls to China are expected to reduce annual revenue by $1.5 billion.
Despite the tough measures, Intel's stock has risen 6% since the layoff announcement, indicating investor optimism in its strategic pivot. The semiconductor sector is undergoing significant transformation, with Intel's future hinging on its ability to streamline operations and focus on AI chip development.
