Intel has begun cutting jobs in California as part of its cost-cutting and restructuring strategy introduced by CEO Lip-Bu Tan. The move comes two months after Tan warned that staff reductions were unavoidable and that 15% - 20% of the company's staff would be laid off. Officially, Intel is eliminating excessive management layers, but a CRN report indicates that the company is surprisingly laying off chip design engineers and architects. Additionally, the company is shutting down its automotive chip division, according to Oregon Live.
Among the job categories being eliminated are 22 physical design engineers, three physical design engineering managers, and several logic and product development engineers. The company is also removing roles such as cloud software architects and engineering managers, in addition to positions tied to business and project management, including a vice president of IT and multiple technology strategy leads. Employees in California are engaged in the development of CPU and GPU products.
According to a notification submitted to the state, 107 employees based at Intel's Santa Clara headquarters will be laid off. The filing complies with California's WARN Act, which requires disclosure when 50 or more workers are affected within a 30-day period. The layoffs are scheduled to begin on July 15. Impacted employees have been given either a 60-day notice or a shorter four-week notice, paired with nine weeks of compensation and benefits.
Intel is also exiting the automotive chip market. The division, which operated within the Client Computing Group, will be shut down. Intel’s automotive business is based in Munich, Germany, leveraging its proximity to major European automakers and suppliers. As of 2024 – 2025, the unit is (or was?) led by Jack Weast, a longtime Intel veteran, Intel fellow, and former VP at Mobileye. To succeed in developing platforms for software-defined vehicles, Intel's automotive unit had autonomy over product strategy and customer engagement. Most employees in that unit are expected to lose their jobs as the company shifts focus to its core offerings in client and data center solutions.
The cuts are part of Intel’s larger effort to eliminate layers of bureaucracy and improve execution speed. In an internal communication from April, Tan highlighted a shift in performance measurement, criticizing a past practice where leadership success was tied to the size of one's team. He stated that going forward, efficiency and impact with smaller teams will be Intel's way of operation.
"I have been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams," Lip-Bu Tan wrote in a letter to employees back in April. "Going forward, this will not be the case. I am a big believer in the philosophy that the best leaders get the most done with the fewest people. We will embrace this mindset across the company, which will include empowering our top talent to make decisions and take greater ownership of key priorities."
Tan emphasized that leadership would be responsible for determining how best to align personnel changes with the company's strategic priorities, which include laying off 15% to 20% of its personnel. Earlier this month, it turned out that the company will lay off 15% to 20% of its fab staff as well as outsource a significant portion of marketing operations to Accenture, which is projected to use AI to communicate with Intel customers.
Intel is committed to reducing spending by $500 million this year and an additional $1 billion the following year.
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