Intel Corp., major Arizona employer, to cut 15% of its workforce

Intel Corp., one of Arizona’s largest employers, announced plans to cut about 15% of its global workforce as part of a massive restructuring triggered by weak financial results.

Intel, headquartered in Santa Clara, California, currently ranks as Arizona’s 11th-largest nongovernmental employer, with 13,000 employees as of last year’s Repubic 100 special report. 

The company announced the cuts, designed to save $10 billion, after the stock market closed Thursday.

It was not immediately clear how the cuts would affect its Chandler operation.

“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate. Our revenues have not grown as expected – and we’ve yet to fully benefit from powerful trends, like AI. Our costs are too high, our margins are too low,” Intel CEO Pat Gelsinger said in a note to employees Thursday.

“We need bolder actions to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”

He said the company would offer a companywide “enhanced retirement offering” for eligible employees and an application program for voluntary departures. 

Intel received up to $8.5 billion in federal grants as part of a preliminary agreement announced by President Joe Biden and Commerce Department officials during a visit to Arizona on March 20. The funding was earmarked to rebuild America’s technological leadership in semiconductors. The government could make up to $11 billion in loans available as well, plus a federal investment tax credit of up to 25% of certain expenses.

The agreement called for construction of two new leading-edge logic fabs and modernization of one existing fab at Intel’s Chandler campus. That would significantly increase leading-edge capacity, including high-volume domestic production of Intel 18A, the company’s most advanced chip design.

Intel has operations in Arizona, Oregon, New Mexico and Ohio in the U.S. and in countries around the world.

This is a developing story. Return to azcentral.com for updates.