Semiconductors

Intel's layoff of 669 employees in Oregon is part of ongoing strategic efforts to become a 'leaner, faster, and more efficient company,' aimed at strengthening long-term success and supporting future growth. This round is a continuation of earlier cuts in 2025, bringing the total Oregon job losses for the year to over 3,000. The reductions are primarily driven by significant manufacturing setbacks, intense competition from rivals like Nvidia and AMD, and a broader cost-reduction initiative. Intel reported a nearly $19 billion loss in fiscal year 2024, highlighting financial pressures. The restructuring aligns with new CEO Lip-Bu Tan's strategy to reduce 'organizational complexity' and regain ground in the global chip race, particularly after falling behind in advanced process technology and missing out on the booming AI chip market. The company is also suspending its stock dividend to preserve capital for investment in technology and research and development.

Intel initiated a comprehensive strategic restructuring and efficiency drive to regain its competitive edge in the semiconductor industry, particularly amid intensifying competition from rivals like Nvidia in the AI market. This involved significant cost-cutting measures, a focus on AI chip production and factory streamlining, and a commitment to becoming a more financially disciplined foundry. Key actions included halting major planned factory projects in Germany and Poland, decommissioning and gradually closing the assembly and test operations in Costa Rica while consolidating them to larger facilities in Vietnam and Malaysia, and slowing the pace of construction for a new plant in Ohio. The restructuring also aimed to optimize the global production network, improve return on invested capital, and strengthen the core product portfolio by focusing resources on high-return projects and advancing the artificial intelligence roadmap. The company also streamlined management layers and reduced its R&D budget by axing multiple projects and initiatives.