Intel to Cut Over 5,500 US Jobs Amid Decline in Chip Market Position

Intel is initiating a significant workforce reduction exceeding 5,500 employees across the US. This move is part of a broader strategy by the chipmaker to regain competitiveness amid rapid changes in the CPU and AI semiconductor markets.

Largest Round of Intel Layoffs Set to Reshape US Operations

According to recent Worker Adjustment and Retraining Notification filings, Intel will dismiss 5,563 employees across several US states. The biggest impact will be felt in California, where 1,935 employees are set to be laid off, and Oregon, where 2,932 jobs are being eliminated, an increase fourfold from its earlier estimate. Arizona will also see 696 job cuts. This overhaul reflects Intel’s aggressive restructuring under CEO Lip-Bu Tan, aimed at trimming as much as 20% of its global workforce.

Strategic Setbacks Behind Mass Layoffs

Intel’s standing in the global semiconductor landscape has declined sharply. Once a dominant force, Intel now finds itself outside the world’s top 10 chipmakers by market capitalisation, with a current valuation of $103 billion, less than half of its worth 18 months ago. Tan has openly acknowledged the company’s diminished competitive position, especially when compared to rivals like Nvidia and AMD in the AI chip segment.

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Intel Faces Tough Road Ahead in AI and Foundry Plans

Intel's struggles extend beyond just CPUs. The company's attempts to penetrate the enterprise AI chip market have lagged far behind dominant players like Nvidia, which recently crossed a $4 trillion market cap. Tan admitted that Intel may already be too late in the AI chip training segment. Meanwhile, the future of Intel's new 18A chipmaking process remains uncertain as customer interest seems tepid, despite its competitive aspirations against TSMC’s technologies.

Conclusion

Intel’s decision to lay off over 5,500 US employees reflects its urgent need to become leaner and more agile. As the company endeavours to reinvent itself in an increasingly competitive semiconductor landscape, these cuts spotlight the scale of transformation required to reposition Intel in the global chip race.

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