Intel Layoff Plans Include Up To 20 Percent Of Factory Workers: Report

The semiconductor giant reportedly lays out layoff plans nearly two months after CEO Lip-Bu Tan announced it would lower operating and capital expenses in line with his mandate to streamline the organization, eliminate management layers and enable faster decision-making.

Intel has reportedly told employees it plans to lay off 15 percent to 20 percent of workers from its chip manufacturing division, with job cuts expected in other divisions.

The Oregonian on Monday reported that Naga Chandrasekaran, general manager of the Intel Foundry Technology and Manufacturing organization, informed factory workers of the news in an email sent two days prior.

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“These are difficult actions but essential to meet our affordability challenges and current financial position of the company. It drives pain to every individual,” wrote Chandrasekaran, a former Micron executive who joined Intel last year. His other titles include executive vice president and chief technology and operations officer.

An Intel spokesperson told CRN that the company is “taking steps to become a leaner, faster and more efficient company,” as it had previously announced.

“Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution,” the representative said in a statement. “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.”

The Oregonian reported that Intel is “planning major cuts in other parts of its business, too” but no specifics were disclosed.

Intel had 108,900 employees as of last December, down from the 124,800 workers it had a year before that, according to its two latest annual reports.

The semiconductor giant reportedly laid out the layoff plans nearly two months after Lip-Bu Tan, who became Intel’s CEO earlier this year, said the company would reduce its operating and capital expenses in line with his mandate to streamline the organization, eliminate management layers and enable faster decision-making.

When Tan’s plan was announced in late April, the company did not disclose how many jobs it expected to cut, but the CEO told employees in a public memo that “there is no way around the fact that these critical changes will reduce the size of our workforce.”

“We must balance our reductions with the need to retain and recruit key talent,” he wrote. “I will empower each of my leaders to make the best possible decisions aligned with our top priorities. These decisions will not be made lightly, and we will keep you regularly informed.”

The moves are meant to serve Tan’s goal of turning around the company after its board reportedly forced former Intel CEO Pat Gelsinger to quit over a perceived lack of progress last year.

“I am taking swift actions to drive better execution and operational efficiency while empowering our engineers to create great products,” Tan said in a statement when his major cost-cutting drive was announced in late April. “We are going back to basics by listening to our customers and making the changes needed to build the new Intel.”

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