Intel, the semiconductor giant, is preparing to announce plans to eliminate more than 20,000 jobs this week, representing over 20% of its global workforce, according to Bloomberg News citing an anonymous source familiar with the matter.
The massive workforce reduction comes as part of new CEO Lip-Bu Tan's strategy to streamline operations and reduce bureaucracy at the struggling chipmaker. Tan, who took the helm last month after serving on Intel's board, has previously expressed concerns about the company having too many management layers.
This round of cuts follows earlier layoffs of approximately 15,000 positions announced in August 2024. Intel employed about 109,000 workers worldwide at the end of 2024.
The news could severely impact Oregon, Intel's largest operating hub, where the company employs 20,000 workers in Washington County - making it the state's largest private employer. Semiconductors represent Oregon's most valuable product and primary export.
The company has faced multiple challenges in recent years, including technological setbacks that cost Intel its industry leadership position. Sales have declined by roughly one-third since 2021, and the company reported a $19 billion loss last year, though much of that consisted of accounting charges and severance costs.
Intel is scheduled to report its quarterly financial results on Thursday, followed by an all-hands meeting with CEO Tan on Friday morning. The company declined to comment on the Bloomberg report.
The restructuring appears aimed at simplifying operations while refocusing on engineering and key projects. However, it remains unclear which specific positions will be affected and whether the cuts will impact core engineering teams critical to Intel's product development and manufacturing capabilities.
Investment analysts note that while Intel isn't facing immediate financial crisis, the company needs to address fundamental issues to remain competitive, particularly in the growing artificial intelligence chip market where it has struggled to gain traction.