Less than four months after being named CEO of Intel Corp, Lip-Bu Tan has announced that the Santa Clara-based chipmaker will be laying off another 20% of its employees – more than 20,000 worldwide – including 584 jobs in California and 529 positions in Oregon this month.
Revelations of the continued layoffs and new restructuring by the struggling semiconductor firm generated headlines in news and tech-focused media worldwide.
“Twenty, 30 years ago, we were really the leader. Now I think the world has changed. We are not in the top 10 semiconductor companies,” Tan told employees during a recent internal meeting, referring to Intel’s current position in terms of market capitalization, according to a transcript leaked this week and obtained by OregonLive.
Intel is losing ground to fellow Santa Clara giants AMD and Nvidia, according to multiple tech industry reports.
According to reports from Reuters and other international media today, Tan recently told employees,"the gap has widened too much to catch up with leading AI companies like NVIDIA.”
In response, an Intel spokesperson explained that it was “not a comment about technological capabilities, but a statement regarding the current market value of the corporation.”
Intel employment has dropped steadily since 2022, from 131,900 to 124,800 in 2023, and to 108,900 in 2024, as sales have lagged and manufacturing of semiconductors, especially for AI-related products, has failed to meet the growing demands of the technology industry, according to multiple trade publications.
Tan, according to industry experts, is continuing his predecessor's approach of reducing the firm's workforce and refocusing the business on chip manufacturing.
In California the permanent layoffs, set to take effect July 15, will impact six locations in Santa Clara, with more than 400 positions eliminated, and another 174 employees in Folsom, according to the state Employment Development Department.
Intel also issued layoff notices in Arizona and Texas.
Oregon Live reported that Intel is shutting down its automotive technology division and outsourcing some marketing functions. Once the undisputed leader in semiconductors, “Intel has been in a dire state these past few years, with seemingly nothing going right,” said one Korean analyst.
Oregon Live called the competition roiling the semiconductor industry a “borderline fight for survival for the once-great American innovation powerhouse as it struggles to even acknowledge being among the top contenders anymore.”
Intel Corporation announced earlier this week it had decided to spin off its robotics business RealSense, which will raise $50 million in funding. The move is considered to be part of Intel CEO Lip-Bu Tan's bid to streamline his company and shed weight to allow Intel to compete in the semiconductor manufacturing industry.
However, the spinoff of a business that targets the humanoid robot market appears to go against predictions that robots represent a multi-trillion dollar opportunity over the next couple of decades.
On Tuesday, Intel’s overseas funding subsidiary announced Tuesday it will sell 45 million shares of Mobileye Global Inc. an autonomous driving technology company, currently valued at approximately $15 billion.
Mobileye, which develops autonomous driving and driver-assistance technologies, was listed independently from Intel in 2022, though Intel maintains majority ownership. The company’s technology has been integrated into more than 200 million vehicles worldwide through 2024, according to the press release statement.
