After Intel Spin-Out, Wind River Systems Makes Layoffs

Wind River Systems has made dozens of job cuts at its corporate headquarters in California after Intel sold the industrial Internet of Things software provider to a private equity firm last month.

The Alameda, Calif.-based company said it has permanently laid off roughly 64 employees, including a vice president, in Alameda, according to a July 17 letter sent to the state of California's Employment Development Division. The firm's layoff disclosure is part of the federal Worker Adjustment and Retraining Notification Act, which requires most employers to give advance notice of significant layoffs.

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A Wind River spokesperson said in a statement that the company "did a recent restructuring which resulted in the elimination of certain positions."

It is not clear whether the company is making layoffs at its other offices across the world, which includes locations in Germany, Romania, Japan, China and Singapore. Anonymous posts on online message board thelayoff.com indicate the cuts were far steeper and affected other locations, but CRN couldn't confirm.

The layoffs in Alameda include several director and senior manager roles that span engineering, marketing, sales, finance and other functions.

Wind River, which develops embedded operating systems, became an independent company in June after Intel completed its sale of the business to TPG Capital, a private equity firm that bought McAfee from Intel in 2017. McAfee had also made layoffs shortly after it was acquired.

Jim Douglas, Wind River's CEO, told CRN in late June that the company had 1,200 employees and that Intel had "hamstrung" its growth while it was a subsidiary.

"Not a criticism because it was the right business decision — more of a frustration — but if you looked at the investment thesis dollar-for-dollar in investing in some of the software areas that we would want to pursue versus some of those silicon areas that you'd want to pursue in the IoT domain, the silicon investments made way more sense financially just given the margin structure and the ability for Intel to scale. So completely logical, yet it hamstrung us a bit in terms of looking at us as a standalone entity and trying to achieve our growth objectives," Douglas had said.

The deal to sell Wind River was announced in early April while Santa Clara, Calif.-based Intel was under the leadership of former CEO Brian Krzanich, who was ousted last month following the disclosure of a relationship he had with a former employee that broke company policy. Intel had acquired Wind River in 2009.

When the deal was announced, Intel Senior Vice President and General Manager of the Internet of Things Group Tom Lantzsch said the spinout of Wind River was "designed to sharpen our focus on growth opportunities that align to Intel's data-centric strategy," despite industrial IoT remaining a part of that strategy. Wind River had been a part of Intel's IoT Group, whose annual revenue grew 20 percent to $3.2 billion last year, but the subsidiary had been a small percentage of that business, a source said at the time. Intel, however, did say that Wind River was profitable while declining to break out its sales.