Intel to lay off up to 20% of global factory workforce
Sweeping layoffs at Intel's foundry division signal a strategic shift, and could affect hundreds of employees in Israel’s flagship chip plant in Kiryat Gat.
Intel is preparing to lay off as much as one-fifth of its global factory workforce, marking one of the deepest restructurings in the company’s history. The move threatens to affect hundreds of workers at Intel’s Kiryat Gat plant, which employs around 4,000 people and serves as a critical node in the company’s global manufacturing network. Intel currently employs a total of 9,350 people in Israel.
“These are difficult actions but essential to meet our affordability challenges and current financial position,” wrote Naga Chandrasekaran, Vice President of Manufacturing, in an internal memo to employees first reported by The Oregonian. “It drives pain to every individual.”
Intel began notifying employees in April of the impending layoffs but had not previously disclosed the extent. The planned reduction - between 15% and 20% of the foundry division - will largely take effect in July and reflect a combination of strategic downsizing, project cancellations, and skill-based reassessments.
The cuts underscore a dramatic rethinking of Intel’s manufacturing footprint under CEO Lip-Bu Tan, who has promised to transform the once-sprawling chip giant into a leaner, more execution-focused company. What sets this round apart is its scope: manufacturing units, previously considered untouchable, are now firmly on the chopping block.
At the heart of Intel’s Israeli operations, the Kiryat Gat facility has historically been spared from layoffs due to its central role in chip production and the substantial incentives it receives from the Israeli government. But that protective buffer appears to be eroding.
Initial cuts at the site, first reported by Calcalist last week, are expected to target mid-level managers. Intel has not confirmed exact figures for the Kiryat Gat site.
The company said in response to Calcalist's report on the impending layoffs in Kiryat Gat: "As we announced earlier this year, we are taking steps to become a leaner, faster and more efficient company. Removing organizational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution. We are making these decisions based on careful consideration of what’s needed to position our business for the future, and we will treat people with care and respect as we complete this important work."
Intel's foundry division has been at the heart of the company’s pivot toward contract chip manufacturing, an effort to compete with global giants like TSMC and Samsung. That strategy appeared to hinge on expanding and upgrading its internal facilities, including those in Israel, Ireland, and the U.S.
But with more than 20,000 employees already laid off globally since 2022, and reports indicating a similar number could be cut in the months ahead, Intel is signaling that even its cornerstone ambitions will not be insulated from financial and operational realities.
Chandrasekaran’s memo makes clear that the restructuring is not only about costs but also about focus. “These reductions will be based on a combination of portfolio changes, level and position elimination, skill assessment for remaining positions, and some hard decisions around our project investments,” he wrote.
