Intel Starts Layoffs Under Lip-Bu Tan, Some Impacted Roles Listed

The semiconductor giant has begun layoffs in California, according to a notice sent by Intel last week, two months after CEO Lip-Bu Tan warned that job cuts were inevitable as part of what he says is his plan to turn around the beleaguered chipmaker.

Intel has begun layoffs that were foreshadowed by CEO Lip-Bu Tan two months ago as part of what he said is his plan to turn around the beleaguered semiconductor giant.

The chipmaker said in a notice last Wednesday to the state of California that it plans to lay off roughly 107 employees who are connected to its headquarters there in Santa Clara.

The notice is required by California’s Worker Adjustment and Retraining Notification (WARN) Act when a layoff round impacts 50 or more employees in a 30-day period at a company site located in the state.

An Intel spokesperson reiterated a statement it made to CRN last week in response to a report last Monday that said the company plans to lay off 15 percent to 20 percent of workers from its chip manufacturing division, citing an internal memo.

“As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company. 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.

“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 spokesperson added.

When Intel announced its plan in late April to reduce operating expenses by $500 million this year and another $1 billion next year to “drive improved execution and operational efficiency,” Tan 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.”

In the WARN notice, Intel said the layoffs are expected to begin July 15. The company said employees have either received a 60-day notice ahead of their separation or a four-week notice that comes with nine weeks of pay and benefits “in lieu of further notice.”

The roles impacted include 22 physical design engineers, three physical design engineering managers, three system-on-chip logic design engineers, three product development engineers, four design-for-test design engineers, six cloud software architects, four cloud software engineering managers and two cloud software development engineers.

The layoffs also hit an AI systems and solutions engineering manager, a vice president of IT for a business unit, a business project manager, an engineering project manager, a silicon design engineering manager, a strategic business development manager, a software product manager, a technology project manager and a technology strategy manager.

Intel has made clear that Tan is seeking to cut down on management roles to speed up decision-making and reduce bureaucracy in the company, which he views as a major issue.

“I’ve been surprised to learn that, in recent years, the most important [key performance indicator] for many managers at Intel has been the size of their teams. Going forward, this will not be the case,” he wrote in his April memo to employees. “I’m a big believer in the philosophy that the best leaders get the most done with the fewest people.”

Other details about Intel’s layoff plans have emerged over the past week, with The Oregonian reporting last Friday that the company plans to cut many marketing roles as part of a plan to outsource those functions to global consulting giant Accenture.

The publication said on Tuesday that the company plans to shut down its automotive chip business, which will result in most of that division’s workers losing their jobs.

Intel confirmed the two moves in separate statements to CRN.

“We are focused on modernizing our digital capabilities to serve our customers better and strengthen our brand,” an Intel spokesperson said regarding the outsourcing plan.

“Accenture is a longtime partner and trusted leader in these areas, and this engagement will allow Intel and its partners to drive better business outcomes through simpler processes and programs,” the representative added.

The Intel spokesperson said the decision to “wind down the automotive business,” which resided within the Client Computing Group, is part of a move by Tan to refocus on the company’s core client and data center portfolio.