Third round of layoffs at Intel will hit Israel

Chipmaker Intel confirmed last week that it would carry out a round of layoffs – its third in the past year – in order to cut costs. Numerous reports indicate that thousands of layoffs will begin next month with a focus on Israel’s highly active PC chip manufacturing division. Intel’s economic performance has been hit hard over the past year by a sharp decline in PC sales, delays in product launches and increased competition in data center processors and graphics processors.

Dylan Patel, senior analyst at SemiAnalysis, predicts that Intel will lose 20% of its workforce in data centers, artificial intelligence and customer computing clusters due to the need to cut spending by 10%.

The new round of layoffs could affect the company’s activities in Israel. The Client Computing Group has thousands of employees in Israel at development centers in Haifa, Jerusalem and Petah Tikva, and among its senior managers is Shlomit Weiss, who serves as Joint General Manager of the Engineering Division. Intel Datacenter and AI Group (DCAI) are also active in Israel, although with a limited presence. Among others through artificial intelligence chip maker Habana Labs and connectivity chips for data centers (IPU), which has about 450 employees in Israel.

Intel has cut several projects, including a $700 million cooling plant in Oregon, a $200 million R&D center in Haifa, reorganized the graphics processor division, scrapped the Rialto Bridge graphics processor, delayed the Falcon Shores chip, and sold a center design unit. data. . Layoffs on this scale are unprecedented. After offering voluntary retirement plans to its employees, it began laying off a few thousand employees around the world at locations such as its research and development center in Folsom, California, and company centers in Ireland, Oregon and Israel. In addition, the CEO has given himself a 25% salary cut while cutting senior managers’ salaries by 5%.

Intel has not significantly increased its workforce of about 12,000 employees in Israel for several years. In addition, Intel Advanced Driving Assistance Systems (ADAS) Mobileye Global Inc. (Nasdaq: MBLY) has 2,000 employees, but is now an independently traded company. Next month, the company in Israel will publish its annual corporate responsibility report in which it will update the number of its employees in Israel. However, Intel’s global employee count rose from 121,100 people at the end of 2021, a record year for the company, to 131,900 at the end of 2022. In other words, Intel continued to grow until last year when its internal crisis intensified.

future stability? few rays of light

Intel declined to provide details about the planned layoffs but said, “Intel is accelerating its strategy while navigating a challenging macro environment. We are focused on identifying cost reductions and efficiency gains through multiple initiatives, including some business and job-specific workforce reductions.” Areas across the company. We continue to invest in core areas of our business, including manufacturing operations in the United States, to ensure that we are well positioned for long-term growth.”

Published by Globes, Israel business news – en.globes.co.il – on May 14, 2023.

© Copyright Globes Publisher Itonut (1983) Ltd., 2023.