Intel lets go of 2,000 staff at Oregon R&D site, offices in Texas, Arizona, California

Intel this week handed out pink slips to more than 2,000 workers across the United States.

The latest of these job cuts saw 1,300 people let go at Intel’s Hillsboro offices – a crucial research and development hub where many of the chipmaker’s next-gen parts get their start.

First reported by the Oregonian on Tuesday, the layoffs are part of a massive staffing reduction that Intel announced in August following a disastrous second quarter. The job cuts will see the x86 giant cut 15 percent of its global workforce.

The layoffs in Oregon represent a little over five percent of Intel’s workforce in the state, which totaled [PDF] 23,000 employees at the start of the year. However, this figure may not encompass the full scope of staff reductions hitting the R&D hub – including staff buyouts and early retirements, the brain drain could be even more substantial.

An Intel spokesperson told us the job cuts were made “as part of the broad-based cost savings plan we announced in August” and represent a “hard but necessary decision to reduce the size of our workforce.”

“These are the most difficult decisions we ever make, and we are treating people with care and respect,” the spokesperson added, stating that the cuts “support our strategy to become a leaner, simpler and more agile company as we position Intel for long-term sustainable growth.”

Intel’s Hillsboro campuses, including Gordon Moore Park, are key development sites for leading-edge semiconductors. Earlier this year, the facility welcomed the “industry’s first” high numerical aperture (NA) extreme ultraviolet (EUV) lithography system from ASML, which will eventually be used to develop next-generation process technologies.

Other technologies pioneered at the site include backside power delivery, advanced liquid cooling, quantum computing, and the chip shop’s Foveros 3D packaging tech.

On Wednesday, we learned that Intel had also issued 385 pink slips in Arizona, 318 in California, and 251 in Texas.

These cuts are by no means surprising. As CEO Pat Gelsinger noted in a public letter late last month, since announcing the sweeping layoffs in August, Intel had already axed more than 7,500 positions through voluntary early retirement and separation offerings. Even after this week’s cuts, many more job losses will be required to meet Intel’s workforce reduction targets.

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While more layoffs are inevitable, Intel remains committed to expanding its US-based foundries – which are slated to receive $8.5 billion in CHIPS and Science Act funding in addition to another $3 billion for a Secure Enclave project to produce high-tech chips for military applications.

Among these projects is a $36 billion investment to expand [PDF] Intel’s Hillsboro operations, a $30 billion fab project in Arizona, and $20 billion for a pair of fabs in Ohio.

Intel’s plans to expand in Europe are moving more tentatively. Work in Poland and Germany has been delayed by “approximately two years” – a possible sign that Intel feels it will miss out on funding under European Chips Act. If that happens, it is unlikely the European plants will be built.

This week’s job losses come as Intel looks to cut its losses – which, in Q2 alone, totalled $1.6 billion. Much of the bleeding is driven by Intel’s fledgling Foundry unit, which posted a $2.8 billion operating loss last quarter and has cost the silicon slinger $5.3 billion since the start of its fiscal year.

In addition to massive layoffs, Intel has also announced sweeping cuts to capital expenditures, research and development, and won’t pay a dividend in Q4. Combined, Intel expects these measures to save it more than $10 billion in 2025.

Intel is due to release its Q3 earnings on October 31. It previously forecast third-quarter revenues of $12.5 billion and $13.5 billion, which amounts to a 5 to 12 percent decline from the same time last year. ®