Amid weak PC demand, layoffs coming to Intel

Layoffs may be on the way at Intel, Oregon’s largest employer.

The moves would come as the semiconductor industry is pushing the state for more incentives. It further illustrates the complexity of an industry that must invest heavily for the future while facing current economic headwinds.

Bloomberg, citing unnamed sources, reported late Tuesday that Intel is planning significant workforce reductions that could affect the sales and marketing division. The cuts could mean thousands lose their jobs. Intel could announce the move during the company’s next earnings release, according to Bloomberg. Intel reports third quarter earnings Oct. 27.

Intel did not immediately return a request for comment.

In July, the company reported a surprise loss in the second quarter and reduced its full year guidance by up to $11 billion. The company cited changing macroeconomic conditions as one of the drivers. Its two core customer areas, PCs and the data center, both logged revenue declines.

While the PC market, fueled by the pandemic and consumers working and learning from home, had been surprisingly strong, the PC bump doesn’t appear to be sustaining.

Last week, Intel rival Advanced Micro Devices, which has been gaining market share from Intel, announced that its third quarter earnings would miss its revenue guidance by about $1 billion. The company cited PC weakness.

Worldwide PC shipments are down 15% in the third quarter, amid weak consumer demand and uneven supply, according to research firm IDC.

The last time Intel made significant workforce cuts was 2016, with a major restructuring that cut 11% of the workforce, or 12,000 jobs. Following those cuts, Oregon saw a 1% change in the number of Intel employees at its four campuses in Washington County.

Intel has 121,000 global employees. Of those 22,328 are in the Portland metro. The Oregon employee count is higher than it was in 2016.

Intel faces the changing macroeconomic conditions as the company invests heavily in its manufacturing as CEO Pat Gelsinger looks to recapture the company’s technological edge that it lost to rival manufacturers. The company pushed heavily for recently approved federal incentives, and it announced major construction at manufacturing, or fab, sites in both Arizona and Ohio.

Locally, the company is lobbying Oregon lawmakers for more incentives in order to continue growing in the state. Intel recently completed a $3 billion expansion of its Ronler Acres fab, where the company does its manufacturing R&D. All new manufacturing processes are developed here and then sent to the company’s other production fabs.

It is in the process of developing an application for federal incentives to create an Advanced Lithography Center to help research new lithography technology which is foundational for making chips smaller.