Intel Cuts Jobs for Survival: Shuts Automotive Division, Potentially Faces Over 10,000 Layoffs in Chip Manufacturing

TradingKey - According to a report by The Oregonian, Intel has announced the closure of its automotive business and plans to lay off the majority of employees in that division.

Back in April, Intel's new CEO, Lip-Bu Tan, warned of impending layoffs due to declining sales and dim revenue prospects. This warning is now coming to fruition. 

Although the automotive business is not a core segment for Intel, and the company has not disclosed its revenue or employee numbers, its website states that Intel processors are currently used in 50 million vehicles.

Intel also holds a majority stake in Israeli autonomous driving technology developer Mobileye, but the closure of the automotive division does not appear to directly affect Mobileye's operations.

Previously, in mid-June, Intel informed its chip manufacturing department employees of plans to start layoffs in July, aiming to cut 15%-20% of its workforce. Chip manufacturing is central to Intel's business, and these cuts could deal a significant blow to the company. The roles affected range from technicians on the production floor to chip researchers. Some media speculate that the manufacturing department layoffs could result in more than 10,000 job losses.

Last week, Intel informed its marketing department that most of its positions would be outsourced to consulting firm Accenture. Intel believes this AI-powered contractor can market its products more effectively, leading to further layoffs next month.

Since Lip-Bu Tan took the helm as Intel's CEO in March, he has not publicly outlined a strategy to revitalize Intel. However, he has expressed a desire to make Intel leaner and more efficient, thereby fostering innovation.

In April, Tan announced plans to cut spending, targeting a reduction to $17 billion for the 2025 fiscal year and further down to $16 billion in 2026. He informed employees through a public memo that workforce reductions would be inevitable.

According to the company's financial reports, Intel had a total of 109,000 employees as of the end of 2024. In 2024, Intel had already laid off 15,000 employees.