Wave of layoffs at Intel: Up to 20 percent of Fab employees have to go

The layoffs at Intel continue. Now, according to the well-connected newspaper The Oregonian, the workers at the semiconductor factories (Fabs) are being hit. This could have a profound impact on one of the chip manufacturer's core businesses.

The newspaper has a memo to employees from Naga Chandrasekaran, Intel's head of manufacturing and technology development, according to which up to 20 percent of factory employees worldwide will have to leave. The wave of redundancies is set to begin in July and will particularly affect Intel's largest production site in Oregon with 20,000 employees.

Essential measures

“These are difficult measures, but they are essential to address our affordability challenges and the company's current financial situation. This is painful for everyone,” The Oregonian quotes Chandrasekaran as saying.

The new wave of layoffs could rival last year's, according to the report. Back then, Intel laid off 15,000 employees. However, Intel will not offer a voluntary redundancy option for the new layoffs. Instead, decisions will be based on performance and the company's future priorities. The company will “treat people with care and respect”, said Chandrasekaran.

Wave of redundancies with advance notice

Rumors about possible further redundancies at Intel have been circulating for months. In the course of the announcement of the latest quarterly figures, the new CEO Lip-Bu Tan, who was only appointed in March, confirmed that there would be further redundancies. “Intel is taking action to achieve better and more efficient execution across all business units,” reads Intel's annual report. The plan includes streamlining the organization, reducing management levels and accelerating decision-making processes.

The dismissal of many Fab employees is likely to be only part of the wave of redundancies. After all, the new CEO said that the primary aim was to clean up the management level. The fact that Intel is laying off employees in fabs could be related to reducing its chip production and having it carried out by TSMC – Intel is to hand over at least part of the Nova Lake S series to the Taiwanese chip contract manufacturer.

(afl)