Intel admits it's too late to catch up, lays off thousands of workers

Intel has filed documents that reveal the company is planning to lay off as many as 5,000 employees in California and Oregon.

4

Intel's goal of moving to reduce company-wide headcount by 20% and reduce operating costs comes after the company has already shed approximately 16,000 workers in August 2024, which was shortly after the company underwent, and in some ways still enduring, one of its biggest failures in recent memory - 13th and 14th-gen processors Raptor Lake processors being unstable due to hardware degradation.

These issues and Intel's lack of public acknowledgment of them until pressured by consumers resulted in the company breaking consumer trust and having to participate in a lengthy RMA process for any affected customer.

4

All of these mounting issues caused Intel to loosen its once vice grip it had around the CPU market, with AMD now capturing a large portion of the market and essentially any unhappy Intel customer that was unlucky enough to be burdened by a Raptor Lake CPU. This isn't the only problem Intel is dealing with, as the CHIPS Act was expected to inject billions of dollars into the semiconductor market in a bid to bring semiconductor manufacturing to the US. But now that is in doubt.

Layoffs across the company are happening in various locations and departments, with Worker Adjustment and Retraining Notification (WARN) notices, which are filings some states deem as mandatory for when large companies or businesses lay off staff, revealed Intel intends to let go as many as 2,500 workers from Hillsboro and Aloha in Oregon, with another 2,000 layoffs planned at its Folsom and Santa Clara sites in California.

4

The layoffs don't stop there as local media in Arizona have reported Intel initially planned to lay off as many as 170 employees, but has now increased that figure to 700 people. The reason? The employees have been deemed surplus to what is required to run.

A current Intel employee spoke to The Register and said there is an "air of gloom over the plant," and that "everyone's wondering if they're going to be next." This same source informed the publication that many of the cuts appear to be in areas of the company that aren't working on hardware, with many of the layoffs targeting office staff. However, with such massive amounts of layoffs, employees can't help but "look over their shoulder".

Intel, the once dominant player in X86, is now surrendering its crown to its competitors, such as AMD, which now have superior design and manufacturing capabilities. However, Intel isn't alone in the layoffs, as AMD has also reduced headcount, albeit not as severely as Intel.

Intel has since responded to these layoffs with a statement, saying the decision to lay off its workers was to take steps to become a leaner, faster, and more efficient company. The goal of the layoffs was to eliminate "organizational complexity," and the decisions were made after careful consideration of what is needed for the company to move forward. Despite these efforts, Intel CEO Lip-Bu Tan has previously admitted it will be a "marathon" to catch up to competing companies such as AMD and NVIDIA.

"As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution," a spokesperson told The Register

"We are making these decisions based on careful consideration of what's needed to position our business for the future, and we will treat people with care and respect as we complete this important work."