Shamini 
(C): Twitter
Intel is about to lay off over 5,500 workers across the U.S., making one of the company’s biggest reductions in its workforce in recent years. According to filings under the Worker Adjustment and Retraining Notification (WARN) Act, the largest job cuts will come in California, Oregon and Arizona. The layoffs come amid a larger effort for cost savings led by new CEO Lip-Bu Tan, as Intel has been working to stabilize its business in the semiconductor market and regain solid footing.
In California, Intel has doubled its previous layoff estimate to 1,935 jobs. Oregon, where the company is the largest private employer, will be impacted the most with cuts of 2,932 jobs and four times as many as what was previously reported. Arizona will see a loss of 696 jobs. These layoffs come as Intel is trying to streamline its organization for better competitiveness as it trails Nvidia and AMD in the CPU and AI GPU markets as reported by Economic Times.
Falling Behind in the AI and Chipmaking Race
Under Tan’s leadership, Intel plans a workforce reduction of up to 20%. The CEO stated that Intel isn’t in the top 10 semiconductor companies which markedly contrasts the position the company once enjoyed. Furthermore, he expressed that Intel has fallen extremely behind in the AI chip market and that, in fact, it may be too late for Intel to effectively compete against Nvidia, which recently reached a $4 trillion market cap.
Future Uncertainty and Strategic Shifts
Though the launch of its Intel 18A chipmaking node is imminent, Tan fears that customers will accept Intel’s 18A node in limited numbers. As the company’s market capitalization drops to $103 billion which is less than half of what it was worth 18 months ago. The recent layoffs are a crucial element in the company’s long-term turnaround efforts.
