Intel to cut over 5,500 US jobs in cost-cutting strategy

Intel plans to cut over 5,500 jobs across the US, surpassing earlier estimates of 4,000.

California will see 1,935 layoffs, double the initial estimate.

Oregon, where Intel is the largest private employer, will lose 2,932 jobs, four times more than expected. Arizona will see 696 positions cut.

These layoffs are part of Intel’s cost-reduction strategy under CEO Lip-Bu Tan as the company struggles to stay competitive in the semiconductor industry.

Intel has fallen behind rivals like Nvidia and AMD in the AI GPU and CPU markets.

During a recent meeting, Tan admitted Intel is no longer among the top 10 semiconductor companies due to missed opportunities and customer satisfaction issues.

Its market cap has dropped to US$103 billion, far behind Nvidia’s US$4 trillion.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Intel’s restructuring follows a cyclical pattern tied to market shifts

The current plan to cut 20% of Intel’s workforce represents the third major restructuring in less than two decades, revealing a consistent pattern of large-scale layoffs during competitive challenges.

In 2006, Intel cut 10,500 jobs (10% of workforce) when losing market share to AMD, with CEO Paul Otellini explicitly stating the goal was to become “more agile and efficient,” nearly identical language to current CEO Pat Gelsinger’s justification 1.

Similarly, in 2016, Intel eliminated 12,000 positions (11% of workforce) while struggling with declining PC sales and transitioning toward data centers and connected devices 2.

Each restructuring has followed a similar formula: job cuts targeting 10-20% of the workforce, projected annual savings of $1-3 billion, and promises of increased agility that have not prevented subsequent cycles of similar actions.

The recurring pattern suggests deeper structural challenges beyond cost structures, as Intel has struggled to maintain market leadership through multiple technological transitions from PCs to mobile to cloud and now to AI.