Intel is reportedly planning to lay off around 20% of its factory workforce due to a decline in demand for its core products. This decision, which indicates a critical moment for the company, will affect employees globally, particularly in its manufacturing facilities in Oregon, where Intel is the largest employer with about 20,000 workers.
According to Naga Chandrasekaran, Intel’s Vice President for manufacturing, this move comes as the new CEO, Lip-Bu Tan, seeks to stabilize the company’s finances amidst faltering demand for upcoming AI chips and a struggling foundry business. Despite holding an estimated 65% market share in data center sales, the overall trends for PC and data center demands are soft, prompting the need for deeper cost rationalization.
Industry analysts emphasize that while external factors like tariffs may impact these layoffs, the root cause lies in Intel’s dwindling revenues. This aligns with the company’s ongoing strategy to cut costs in response to falling sales. The efforts to restructure aim to realign spending with their revenue streams, even as the company continues to focus on delivering high-quality chips to remain competitive, especially against rivals like AMD and Nvidia.
Additionally, gathering economic pressures have led to customers delaying upgrades and stockpiling legacy chips, further complicating Intel’s market position. With the company having committed to significant investments to restructure and innovate its chip production, it remains to be seen how these layoffs will influence their ability to bounce back.
For ongoing updates on Intel’s situation, you can explore more at Intel under Tan: What enterprise IT buyers need to know and Intel eyes exit from NEX unit as focus shifts to core chip business.
