(Image source from: bengali.economictimes.com)
The semiconductor manufacturer Intel plans to let go of more than 5,500 workers across different states in the USA, as stated in company documents. Initial predictions had estimated around 4,000 jobs would be lost. Based on Worker Adjustment and Retraining Notification (WARN) documents, which companies are required to submit in specific US states before large layoffs occur, Intel's personnel in California and Oregon will be most affected by the upcoming layoffs. The company has raised its layoff forecast in California to 1,935 workers. In Oregon, Intel, being the largest private employer, intends to eliminate 2,932 positions, which is four times more than what was originally projected. In Arizona, the firm plans to terminate 696 employees. The updated job loss predictions now exceed 5,500 in total.
With the new CEO Lip-Bu Tan at the helm, Intel aims to reduce its workforce by 20% for cost-saving purposes. This significant action arises as the company struggles in the CPU competition, significantly trails competitors like Nvidia and AMD in the AI GPU sector, and faces challenges in making its plans for providing foundry services to other chip designers effective. Earlier this month, Tan informed employees that Intel is no longer listed among the world's top 10 semiconductor companies, according to a report from OregonLive. “Twenty or thirty years ago, we were really in charge. Now, I feel the landscape has shifted. We aren’t in the top 10 semiconductor firms anymore,” Tan remarked during a worldwide meeting with employees. He mentioned that customer satisfaction has declined, and Intel has fallen behind Nvidia in producing AI chips. He noted that the company’s recovery will be a “long journey,” emphasizing that the layoffs are part of efforts to make Intel more flexible and similar in approach to companies like Nvidia, Broadcom, and AMD.
Additionally, Tan indicated that Intel might be too late to contend in the enterprise AI chip sector, which is currently led by Nvidia. “I believe we are too late to catch up in training,” he stated, highlighting Nvidia’s substantial advantage and significant orders from firms such as Meta, OpenAI, and xAI. Intel's market value has fallen to approximately $103 billion, which is less than half of what it was 18 months ago, placing it behind at least 15 other chip firms. In contrast, Nvidia recently reached a market valuation of $4 trillion, buoyed by increasing optimism surrounding AI. At the same time, Intel’s future chip technology, Intel 18A, might also experience slow adoption. As reported by Reuters, Tan has voiced worries that customers may hesitate to embrace the new manufacturing process, even though it is designed to compete with TSMC's products.
