Intel Hits the Brakes on Auto Unit, Plans Massive Job Cuts

According to various media reports, chipmaker Intel is closing its automotive branch and terminating the majority of its workforce. In the communication, the corporation stated that it intends to shut down its automotive Intel architecture division.

It further stated that although it will complete current obligations to clients, "the majority" of the employees in that company will be let go.

Intel clarified in a written statement to a media house that, in order to best serve its customers, the company is once again concentrating on its core client and data centre technologies.

Intel has made the decision to shut down its automotive division under its client computing segment as part of this effort. The company is trying to make sure that its clients have a seamless transition.

Intel Already Made Heavy Investment in Automotive Semiconductors

Over the years, Intel has made significant investments in automotive semiconductors. More than 50 million automobiles have utilised Intel's processors in infotainment systems, instrument clusters, and other automotive applications.

The business unveiled AI-enabled chips in 2024 with the goal of improving voice assistants and in-car navigation. Additionally, it revealed ambitions to introduce its Arc GPU into automobiles.

Intel currently seems to be leaving the market despite these changes. The change is a component of CEO Lip-Bu Tan's larger restructuring initiatives, which are intended to reduce expenses and streamline operations.

Layoff a Common Feature of Intel

The automotive unit's closure comes as Intel announced more widespread layoffs. The company's Santa Clara headquarters will lay off 107 workers, according to a recent WARN warning it issued in California.

According to an Intel representative who spoke to a media outlet, Intel will be able to improve customer service and execution by simplifying its organisation and giving its engineers more authority.

There will likely be further layoffs in Intel's foundry group. Tan informed staff in April that in order to increase operational efficiency, Intel would need to "reduce the size" of its workforce by the second quarter of 2025. With additional cost reductions scheduled for 2026, the chipmaker is aiming to save $500 million this year.

Year 2025 Marked as Year of Layoffs

With big companies like Google, Microsoft, and others continuing to reduce their workforces, layoffs in the tech sector are not expected to halt in 2025.

Companies are still cutting employees in an effort to simplify operations, save money, and emphasise automation and artificial intelligence, even though these figures are much lower than the major layoffs that occurred between 2022 and 2023.

Layoffs.fyi, a website that tracks layoffs in the industry, reports that 93 organisations have laid off nearly 23,500 tech workers so far this year, and the number is still growing. Google and Microsoft are apparently contemplating a new round of layoffs, according to the most recent job reduction reports.

According to reports, AI-led restructuring and performance-based terminations are part of the corporations' goals to increase the effectiveness of their personnel.