Intel to lay off over 10,000 factory workers as part of cost-cutting drive

The company said the layoffs will be driven by investment priorities, skills assessments and performance, and ruled out voluntary exits or buyouts

Intel is preparing to lay off between 15 to 20 per cent of its factory workforce in what could be one of the largest workforce reductions in the company’s manufacturing division, The Oregonian reported. The move is expected to affect over 10,000 workers.

 

The job reductions, expected to take effect in July, are part of a broader cost-cutting effort as the chipmaker continues to face financial and operational headwinds.

 

According to The Oregonian, Intel Manufacturing Vice-President Naga Chandrasekaran wrote an email to employees last week, stating: “These are difficult actions but essential to meet our affordability challenges and the current financial position of the company. It drives pain to every individual.”

   

While Intel did not comment on the email, it reiterated in a statement that it would “treat people with care and respect as we complete this important work”, the report added.

 

“Removing organisational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution. We are making these decisions based on careful consideration of what’s needed to position our business for the future,” the company said.

 

Foundry division to be hit hardest

 

According to the report, the upcoming layoffs will primarily affect staff working under Intel’s foundry division, which includes a wide range of roles — from factory floor technicians to advanced research teams focused on next-generation microprocessor development. The company had approximately 109,000 employees globally at the end of 2024.

 

In April, Intel had hinted at the possibility of layoffs, notifying staff that reductions would begin the following month. However, the extent of the cuts had not been made public until now.

 

No golden handshakes

 

Last year, Intel cut 15,000 jobs across the company, including 3,000 in Oregon. However, unlike that round, the company has said that this round of layoffs will be determined based on investment priorities, skills assessments and individual performance, rather than voluntary exits or buyouts.

 

“These reductions will be based on a combination of portfolio changes, level and position elimination, skill assessment for remaining positions, and some hard decisions around our project investments,” Chandrasekaran said.

 

The restructuring comes as Intel faces ongoing challenges in its core markets, including declining demand for personal computers and data centre chips, along with rising competition in the field of artificial intelligence. The company has also delayed some of its planned capital projects, including postponing the opening of its Ohio factory to 2030.

 

Intel's recently appointed CEO, Lip-Bu Tan, has expressed his intent to simplify operations, reduce layers of management, and accelerate technology deployment. At the same time, he has stressed the importance of attracting and retaining engineering talent — a goal that may be tested by the scale of the coming job losses, the report added.