Oregon technology jobs are hanging in the wind following a recent announcement from Intel outlining reduced costs totaling $10 billion in 2025.
Prior to a planned companywide meeting Thursday, Aug. 1, Chief Executive Officer Pat Gelsinger sent a message to employees foreshadowing impending cuts of 15% — reducing the company’s headcount by around 15,000 roles.
How hard these reductions will hit Intel's Washington County campuses remains to be seen, as the company has not yet filed a notice of the layoffs with the U.S. Department of Labor. Meanwhile, executives cite diminishing revenue coupled with higher personnel costs as a reason for this abrupt shift.
The news comes right after the company reported its second-quarter 2024 results , which saw revenue down by 1% year over year. Over the first half of the year, Intel saw its stock price plummet by 38%, according to the Portland Business Journal .
In a struggle to regain process technology leadership, the company introduced a new operating model in late 2023 that aimed to establish a more secure supply source while pushing technological developments. But that new strategy is experiencing some turbulence.
On one hand, the company faces what Gelsinger described as a “cost structure that is not competitive,” highlighting how the company’s annual revenue was around $24 billion less than it was last year, despite the fact that the current workforce is now 10% larger.
“There are a lot of reasons for this, but it’s not a sustainable path forward,” Gelsinger said.
The top brass also brought attention to operational inefficiencies, emphasizing the need to simplify processes, expedite workflows and eliminate bureaucracy.
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like AI,” Gelsinger explained in the announcement. “Our costs are too high, our margins are too low. We need bolder actions to address both — particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”
As the company takes steps to become leaner, Gelsinger emphasized that reducing operational costs is a priority, including cutting employees. The company is also simplifying its portfolio, identifying underperforming products and focusing on “more impactful projects.”
Washington County alone accounts for nearly a fifth of the global semiconductor company’s employees, including over 22,000 workers across its Hillsboro and Aloha campuses. Just a year ago, the company trimmed its workforce by 5%.
The reduction also marks a blow in the approaching two-year anniversary of the federal CHIPS and Science Act , which saw $8.5 billion in federal dollars invested in Intel’s Hillsboro expansion just this year.
Layoffs are expected to be completed by the end of the year. Next week, Gelsinger said the company plans to announce a companywide enhanced retirement offering for eligible employees, alongside an application program for voluntary departures.
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