When companies experience financial difficulties, they might often sell off property to make some cash. In many cases, the companies lease the property back so as not to move their facilities, so not many things change. This is apparently what is going to happen to Intel's campus in Folson, California, reports OregonLive.
The company is set to sell its 150-acre Folsom, California campus, but keep the site operational. Intel plans to keep its Folsom site near Sacramento operational as the facility currently houses some 5,000 employees who mostly work on software, including GPU drivers, cloud software, and system software. The company aims to optimize the use of the property, which includes seven buildings with 1.6 million square feet of office and lab space. In particular, Intel plans to ink partial leaseback agreements.
The company is also reviewing its 50-acre Hawthorn Farm property in Oregon and consolidating activities at its Santa Clara headquarters. In Oregon, Intel is assessing its smallest site, Hawthorn Farm, which houses offices and labs used for motherboard technology research. The property, operational since the late 1970s, saw 124 job cuts recently but has no immediate plans for sale. Intel is encouraging employees to move to more densely occupied sites in the state. These measures target eliminating underused spaces and fostering in-person collaboration at major hubs.
"We are shifting our global real estate strategy to focus on fewer, more populated locations and eliminate underutilized space," a statement by Intel published by OregonLive reads. "This approach will foster greater in-person collaboration at our largest sites while also delivering cost savings for the company."
Sales and leasebacks have become a strategic tool for Intel to generate cash from its real estate portfolio. While the company is downsizing and consolidating operations, it continues to refine its long-term strategy to balance cost savings while maintaining operational capabilities. This strategy aims to strengthen collaboration, reduce waste, and position the company to recover from its current financial and competitive challenges.
The decision to adjust real estate holdings aligns with Intel's aim to reduce costs by $10 billion. This has already resulted in 15,000 job cuts globally, including 272 in Folsom and 1,300 in Oregon.
