Intel Foundry layoffs could impact 'more than 10,000' factory workers — one fifth of employees affected by 'enormous cutback'

The first reports about Intel's plans to cut workforce in its manufacturing division starting mid-July emerged last Friday. However, the report lacked specifics, which appear to be quite dramatic as the chipmaker reportedly plans to eliminate between 15% to 20% of its Intel Foundry personnel, which will affect over 8,170-10,890 people globally, reports OregonLive.

Naga Chandrasekaran, the head of Intel Foundry, informed staff that the layoffs are necessary to address cost-related challenges and the company's financial position. He stated that reductions would be guided by business priorities, individual evaluations, and decisions around which projects to continue funding.

As of December 28, 2024, Intel's workforce comprised 108,900 people, down from around 124,800 people from the previous year. Intel's Silicon Forest Oregon facilities were not spared from layoffs last year, cutting approximately 3,000 jobs while still retaining roughly 20,000 employees.

Intel has 15 wafer fabs in production worldwide at 10 locations. Intel does not disclose exactly how many of its employees work in production and related services, though the company says that approximately half of its workforce handles production or production services. The remaining half is distributed across R&D, design, sales, administrative roles, client, data center, and other business units. Keep in mind that other divisions are to face similar 15% to 20% cuts this year.

Assuming that around 50% of Intel's personnel are involved in fab operations, that means around 54,450 people. Eliminating 15% to 20% of them means that from 8,170 to 10,890 personnel will be eliminated worldwide.

Intel will not offer buyouts or voluntary departures this year, opting instead for selective terminations in an attempt to keep the best employees with the company, the report says. When the 2025 layoffs were announced this spring, the company emphasized that its intention was to reduce the number of management layers and bureaucracy within the company. However, the new report indicates that affected roles may span a range of positions, from technicians working directly on factory floors or under them to tool operators and support personnel.

Key roles, such as engineers working on cutting-edge process technologies and skilled technicians managing EUV and High-NA EUV lithography equipment, are vital and unlikely to face layoffs. However, Intel may trim positions made redundant by automation or organizational efficiency. While reducing non-essential roles helps cut costs while maintaining critical expertise in the company, it may also reduce operational agility, slow responses to equipment problems, and increase pressure on remaining employees, which lowers morale and could result in costly downtime.

OregonLive notes that federal and state funding are also in question. Intel secured $7.9 billion from the CHIPS Act, receiving $1 billion last year. But the rest of the subsidy package remains uncertain, as the new Trump administration is reviewing ongoing allocations. Separately, Oregon pledged $115 million in public funds, but those are conditional on meeting future hiring and tax revenue targets. If hiring or revenue projections are missed, state funding could be withdrawn.

Follow Tom's Hardware on Google News to get our up-to-date news, analysis, and reviews in your feeds. Make sure to click the Follow button.