Intel to reduce headcount; shuts down automotive chip division

Intel has begun reducing its workforce as part of a cost-cutting and restructuring strategy. The decision comes as the chipmaker is reportedly shutting down its automotive chip division.

The report was based on an internal message Intel sent to employees on Wednesday. CEO Lip-Bu Tan had hinted at a workforce reduction of nearly 15–20% two months ago, affecting roles such as chip design engineers, cloud software architects, engineering managers and architects, according to a report by tech magazine CRN.

The layoffs mark the first major move under the new CEO, who took over in March to revive the struggling Silicon Valley chipmaker after years of challenges.

The job cuts at Intel’s Santa Clara headquarters are scheduled to begin on July 15. The company has not disclosed the exact number of affected employees yet.

In a written statement to Portland-based news publication The Oregonian, Intel explained, “As we’ve said previously, we are refocusing on our core client and data centre products to better serve our customers. As part of this work, we have decided to close the automotive business within our client computing group. We are working to ensure a smooth transition for our customers.”

Intel’s automotive division claims to support over 50 million vehicles globally. The shutdown is not likely to impact Mobileye, the Israeli self-driving tech company. Intel holds a majority stake in Mobileye, which will continue to operate independently.

ET reported in May that Intel is considering selling a part of its business in line with a larger strategy. The aim is to realign Intel’s workforce on the company’s core businesses: chips for PCs and data centres. It will also explore areas such as software, robotics and AI foundation models.

In March, the company laid out plans to consider significant changes to its chip manufacturing and AI strategies. During a town hall meeting, CEO Tan told employees that “tough decisions” would have to be made.

Intel reported an annual loss of $19 billion in 2024, its first since 1986. The Santa Clara, California-based company had 108,900 employees at the end of 2024, according to Reuters.