Intel Corp (NASDAQ:INTC, ETR:INL) is preparing to implement substantial job cuts at its manufacturing sites beginning in mid-July, marking the company’s first major workforce reduction since CEO Lip-Bu Tan took the helm in March.
The layoffs, expected to conclude by the end of the month, are part of a broader restructuring effort aimed at streamlining operations and sharpening Intel’s competitive edge in the global semiconductor industry.
An internal memo reviewed by The Oregonian/OregonLive confirmed the timing of the cuts but did not disclose the number of affected employees or specific locations. Sources familiar with the matter said individual business units have been given autonomy to manage the reductions, as long as they meet financial targets set by senior leadership.
"Removing organisational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution," Intel said in a statement. The company added that the decision followed "careful consideration" and that impacted employees would be treated with "care and respect."
The cuts are likely to affect Intel’s Foundry operations, which have been at the center of the company’s restructuring efforts, according to reporting by Techgig. The Foundry unit is key to Intel’s efforts to establish itself as a leading contract manufacturer, a domain where rivals such as Taiwan Semiconductor Manufacturing Co and Samsung have historically dominated.
Analysts at Wedbush said the job reductions underscore Intel’s struggle to retain market share amid softening demand and customer hesitation. “We view this as yet another sign that INTC is losing share amid declining demand while foundry customers likely wait for INTC to prove out its capabilities before committing essential programs to INTC's initial 18A platform,” Wedbush said in a note.
Intel has faced growing competitive pressure from rivals Nvidia and AMD, particularly in the artificial intelligence (AI) sector, where both have captured significant hardware market share. Analysts have identified Intel’s delayed response to AI hardware trends as a key vulnerability.
While near-term prospects for major foundry contracts appear limited, Wedbush noted that the success—or failure—of Intel’s next-generation 18A manufacturing process will be the “single most significant factor determining the company's trajectory over the next few years.”
Shares of Intel jumped nearly 3.3% in early New York trading.