Santa Clara, CA – June 24, 2025 – Intel Corporation is preparing for another significant round of layoffs, specifically targeting its crucial chip manufacturing operations, according to internal sources and documents reviewed by CRN. The cuts, described as part of an ongoing cost-reduction strategy, could impact up to 20% of the workforce within Intel's Foundry Services (IFS) division and its internal manufacturing units.
This latest move signals deepening challenges for the semiconductor giant as it navigates a complex turnaround effort under CEO Pat Gelsinger. While Intel has previously announced workforce reductions and operational streamlining over the past two years, this wave appears heavily focused on the very heart of its ambitious comeback plan: regaining manufacturing leadership.
Sources indicate the layoffs are expected to hit multiple U.S. fabrication plant ("fab") locations in the coming weeks, including major sites in Arizona, Oregon, and New Mexico. The cuts are reportedly aimed at "rebalancing resources" and improving efficiency within the foundry operations as Intel continues its multi-billion dollar investments in new process technologies and fab expansions globally.
The Human Cost of Restructuring
The potential loss of up to one-fifth of foundry workers represents a severe blow to thousands of employees and their families across multiple states. Many of these positions involve highly specialized technical skills honed over years or decades within Intel's complex manufacturing environment.
"Morale is already low," shared one anonymous engineer at an Oregon fab, speaking on condition of anonymity for fear of reprisal. "We're constantly hearing about the 'IDM 2.0' vision and the big investments, but then you see more people getting shown the door. It makes you wonder who's actually going to build these future chips."
Strategic Context: Ambition Meets Reality
The layoffs come amidst a paradoxical period for Intel's manufacturing arm. On one hand, the company is aggressively pursuing its goal of achieving five "process nodes in four years" and has secured significant U.S. government CHIPS Act funding to build new domestic facilities. On the other hand, its foundry business has struggled to attract major external customers beyond its traditional product lines, while established rivals like TSMC and Samsung continue to dominate the global contract chipmaking market.
For detailed information on the scope of the layoff plans and specific worker impacts, see the exclusive report: Intel Layoff Plans Include Up To 20 Percent Of Foundry Workers.
Analysts suggest the cuts are a painful but necessary step as Intel attempts to improve the cost structure and competitiveness of its manufacturing, especially before its newest advanced fabs (like those under construction in Ohio and Germany) come fully online. However, the risk lies in potentially eroding the deep institutional knowledge and experienced workforce critical for ramping up complex new production processes.
Company Response
Intel declined to comment on specific layoff figures but acknowledged ongoing restructuring. A company spokesperson provided a statement: "Intel is working to accelerate its strategy while reducing costs through multiple initiatives, including some business and function-specific workforce reductions in areas across the company. These are difficult decisions, but necessary to ensure we remain competitive and can fund our ambitious long-term growth plans. We are committed to treating affected employees with dignity and respect."
Market Reaction and Uncertainty
News of the impending cuts contributed to a slight dip in Intel's stock price during afternoon trading. While investors often welcome cost-cutting measures, the scale of the potential reduction within the core manufacturing division raises questions about near-term execution capabilities and the human toll of Intel's aggressive transformation.
The coming weeks will be crucial as Intel formally notifies employees and details any severance packages or outplacement support. For the thousands of foundry workers facing uncertainty, the promise of Intel's manufacturing resurgence now carries a deeply personal and unsettling cost. The company's ability to navigate this restructuring while retaining critical talent and maintaining production momentum will be closely watched by the industry, its investors, and policymakers invested in U.S. semiconductor leadership.
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