In mid-July 2025, Intel is executing a bold restructuring led by new CEO Lip‑Bu Tan, involving sweeping layoffs, the closure of its automotive chip division, and the outsourcing of key operations. The strategy aims to sharpen Intel’s focus on core products—CPUs, GPUs, and data‑center solutions—while streamlining costs and improving performance.
🔻 Workforce Cuts & WARN Filing
Beginning July 15, around 107 employees at Intel’s Santa Clara headquarters received notices under California’s WARN Act. This notification marks the first phase of a larger plan to reduce 15–20% of global staff, primarily affecting foundry and manufacturing divisions. The layoffs include engineers, project managers, cloud‑software architects, and leadership roles—some even a VP of IT.
Employees will receive nine weeks of pay and benefits and either a 60‑day or shortened 4‑week notice period.
🚗 Automotive Chip Division Closure
Intel is shutting down its Munich-based automotive chip unit, which had developed hardware for over 50 million vehicles. Despite past investments—including Mobileye and vehicle-oriented SoCs—the division will be wound down, with most personnel affected. Intel asserts it will honor existing customer contracts but will exit new automotive chip development.
🏭 Foundry Focus & Marketing Outsourcing
A significant portion of the layoffs, up to 20% of factory personnel, will impact the foundry business—Intel’s contract manufacturing arm. Additionally, Intel will outsource global marketing operations to Accenture, shifting toward AI-powered customer outreach.
🎯 Why Intel Is Restructuring
Tan’s overhaul addresses a challenging reality: a $821 million Q1 loss, intensifying competition from NVIDIA, TSMC, and others, and lagging AI chip performance. The cost reductions aim for savings—up to $500 million in 2025, and $1 billion in 2026—while dismantling inefficiencies in management and operations.
Tan has emphasized moving away from “team size” as a success metric, favoring “leaner, faster” structures
🔍 Potential Impacts
📉 Investor Outlook: Intel’s stock slipped ~1%, as investors process the short-term cost of restructuring versus long-term strategic clarity
🧠 Innovation Risk: Cutting key design engineers could slow development of next-gen CPUs/GPUs.
🌍 Industry Swing: Intel’s exit from automotive chips opens doors for NVIDIA, Qualcomm, or TSMC to expand in the auto-tech sector.
Final Perspective
Intel’s mid-July overhaul—mass layoffs, refocus on data-center and core chips, and the exit from automotive chips—marks a decisive strategy reset. While the plan brings cost savings and organizational efficiency, it also carries risks, including talent loss and reduced diversification. July 15 will be a turning point as Intel recalibrates for a leaner future.
