Intel has reportedly begun a series of significant layoffs this week, marking a major internal restructuring under CEO Pat Gelsinger. While rumors of widespread cuts have circulated since April, the company has now started notifying employees individually about their termination.
These layoffs are expected to roll out over the next few weeks, with some employees being dismissed immediately and others waiting for a final decision. Intel has not yet disclosed the total number of affected employees.
Impact on Key Departments #
The layoffs are affecting several crucial areas of the company:
- Intel Foundry: The manufacturing and foundry division is expected to see significant cuts, potentially reaching 15% to 20% of the workforce. This includes technicians, engineers, and R&D personnel, particularly at the Oregon facility.
- Automotive Business: This segment is being shut down entirely, with most employees facing layoffs.
- Marketing: Many employees in the marketing department will be cut, as the company plans to outsource much of this work to Accenture, a large consulting firm. Intel intends to utilize AI more extensively for future marketing activities.
This round of layoffs follows a previous reduction of up to 15,000 employees last summer, which brought Intel’s global workforce down to approximately 109,000.
Foundry Strategy and Global Operations #
Despite the cuts, Gelsinger remains committed to the Intel Foundry business. However, there have been notable changes in global expansion plans. Factory expansion and upgrade projects in Ohio, Germany, and Israel have been paused. Furthermore, the 18A process is currently focused on Intel’s internal products rather than external foundry clients; that role is reserved for the future 14A process.
Layoffs in Israel and Concerns Over Fab 28 #
Intel has also initiated layoffs in Israel, a region where the company has historically avoided widespread cuts due to substantial government support.
In the Fab 28 wafer fabrication plant in Kiryat Gat, at least 200 people are expected to lose their jobs, including mid-level managers, front-line directors, and technical staff at the remote operations center. Fab 28 employs approximately 4,000 of Intel’s 9,000+ employees in Israel. These cuts will reduce the Israeli workforce to about 8,500 employees, totaling roughly 500 layoffs in the country.
Concerns are also mounting over the fate of Fab 28. In late 2023, the Israeli government pledged a $3.25 billion subsidy for Intel to build a new Fab 38 next to Fab 28. However, this project was paused in mid-2024.
There are even rumors that Intel is considering closing Fab 28 entirely, an outcome that seems highly unlikely given the potential backlash from the Israeli government.
An Intel spokesperson declined to confirm or deny the specific details of the layoffs and potential closure. They provided a general statement: “As announced earlier this year, we are working to become a leaner, faster, and more efficient company.” The spokesperson emphasized that the company is “simplifying the organizational structure and empowering engineers to better meet customer needs and strengthen execution.” They concluded by stating that decisions regarding the future workforce are made carefully and that affected employees will be “respected and properly placed.”