Intel has begun to send formal notifications to 1,300 employees at its Gordon Moore Park facility, saying that they only have until next month to stay in their position. This massive job cut is part of the company’s plan to cut more than 15% of its workforce as part of its plan to help turn around after suffering massive losses. According to a report by The Oregonian, this reduction-in-force will affect more than 5% of the Intel workforce in Oregon, and would make it one of the largest layoffs in the state’s history.
Note that this does not include the number of employees that took voluntary severance, buyouts, and early retirement options. Given that the company had 23,000 workers in its Oregon site earlier this year, a 15% reduction would drop this to less than 20,000 employees. The 1,300 affected workers would be less than half of Intel’s target reduction. So, if the company will apply its reduction evenly across the board, we could expect the number of workers that will leave Intel, whether voluntary or not, to reach over 3,000.
Nevertheless, other parts of the company have been hit harder by the cuts. With the Sales and Marketing Group (SMG) getting a 35% cut in costs. While Intel did not indicate how many jobs will be lost in SMG, many jobs and programs are under threat with this massive budget reduction.
The company’s woes were brought to light during its quarterly earnings call in August. The call revealed a $1.6 billion loss driven by Intel falling behind in the AI arms race and widespread failures in its 13th/14th-generation CPUs. Now the company is fighting to stay alive, with the plans to cut assets and put projects on hold. There are even rumors that Qualcomm is making an offer to Intel to buy a part of its business.
Aside from this, Intel is also keen on getting its awards from Washington’s CHIPS Act. It’s currently on track to receive it $8.5 billion direct funding award from the federal government by the end of the year, which will give it a lot of room to breathe. Furthermore, the company confirmed that it will receive a $3 billion award for Secure Enclave, which will allow the company to provide its latest 18A chips to the Pentagon.
Hopefully, Intel can turn around its fortunes sooner rather than later, especially as it seems to be lagging behind Nvidia, AMD, and even Qualcomm in the AI race.
