Intel plans to reduce its workforce in the Foundry division by 15% to 20%, starting in July, as noted in an internal memo obtained by The Oregonian.

This division is responsible for designing, manufacturing, and packaging semiconductors for external clients.

The exact number of employees affected by the layoffs is currently unclear.

As of December 2024, Intel employed around 108,900 individuals, according to the company’s regulatory filing.

This announcement follows ongoing restructuring efforts initiated by CEO Lip-Bu Tan, who took over in March 2025.

Tan has highlighted the importance of streamlining operations and focusing on core business areas. Speculation regarding potential layoffs in the Foundry division has been present since April.

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🔗 Source: TechCrunch

🧠 Food for thought

1️⃣ Intel’s layoffs mirror a recurring pattern of semiconductor industry restructuring

The latest Intel layoffs follow a well-established historical pattern in the company’s strategy during periods of transition.

Intel’s planned 15-20% reduction in its Foundry division echoes similar major restructuring events in 2006 (10,500 jobs cut, 10% of workforce) and 2016 (12,000 jobs cut, 11% of workforce) 12.

This pattern extends industry-wide, with the semiconductor sector seeing a 193% increase in layoffs in August 2024 alone and over 39,500 total job cuts across companies including Onsemi (2,400 jobs) and Microchip (2,000 jobs) 34.

Each major restructuring at Intel has coincided with strategic pivots—from combating AMD’s market share gains in 2006 to shifting from PC-centric to cloud computing focus in 2016 12.

These cyclical workforce reductions typically follow a financial formula: significant one-time costs (Intel’s 2016 layoffs cost $1.2 billion) in exchange for substantial projected annual savings ($1.4 billion in the 2016 case) 2.

2️⃣ New CEO transitions at Intel historically signal major organizational restructuring

Lip-Bu Tan’s leadership moves at Intel continue a tradition of new CEOs implementing significant workforce changes as part of their strategic vision.

Tan’s emphasis on “engineering-first” culture and flattening organizational structure mirrors previous CEO transitions where fundamental shifts were accompanied by major workforce reductions 56.

The 2006 layoffs under then-CEO Paul Otellini similarly emphasized making Intel “more agile and efficient” as the company faced competitive pressures from AMD 1.

In 2016, CEO Brian Krzanich used workforce reduction to shift Intel’s focus toward cloud computing and IoT, reallocating resources toward what he identified as growth areas 2.

The foundry-specific focus of the current layoffs aligns with Tan’s strategic message at Intel Vision about prioritizing core business units while spinning off non-core operations—a recurring theme in Intel’s historical restructuring efforts 56.

3️⃣ Semiconductor industry faces a workforce sustainability crisis amid technological transitions

Intel’s latest layoffs highlight a broader industry challenge: balancing cost-cutting with talent retention during technological transitions.

The semiconductor industry’s approach to workforce management has created a talent pipeline crisis, with declining enrollment in STEM fields due to perceived job instability 3.

Companies like Intel typically incur significant one-time costs for these restructurings—Intel’s 2016 layoffs cost $1.2 billion in severance and related expenses—raising questions about the long-term cost-effectiveness of cyclical hiring and firing 2.

Even as companies implement cost-saving layoffs, many simultaneously emphasize the importance of maintaining their R&D investments, creating tension between short-term financial goals and long-term innovation capacity 76.

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