Intel Corporation has announced its decision to wind down its automotive business, a strategic move aimed at refocusing on core client and data centre portfolios. This restructuring, part of CEO Lip-Bu Tan’s cost-cutting initiatives, will lead to significant layoffs, with 107 employees in Santa Clara, California, already notified.
Intel’s strategic shift
Intel’s decision to exit the automotive sector marks a significant pivot for the chipmaker. The company confirmed on Thursday, 26th June 2025, that it would fulfil existing customer contracts but would lay off most employees within its automotive group. This move is a key component of CEO Lip-Bu Tan’s broader strategy to streamline operations and reduce expenses across the company.
In an emailed statement, Intel explained, "We are refocusing on our core client and data centre portfolio to strengthen our product offerings and meet the needs of our customers." The company further stated, "As part of this work, we have decided to wind down the automotive business within our client computing group. We are committed to ensuring a smooth transition for our customers."
Impact on employees and operations
While Intel has not disclosed the total number of affected employees, layoffs have already commenced. In California, 107 employees in Santa Clara received notice of layoffs taking effect in mid-July, according to state WARN filings. An internal memo regarding the decision was circulated to employees earlier this week.
- Intel’s automotive chipmaking business details are not typically disclosed in earnings reports.
- The broader client computing group, however, is a substantial part of the company, generating £6.0 billion ($7.6 billion) in the first quarter, accounting for roughly half of Intel’s revenue.
- Approximately 50 million vehicles currently utilise Intel processors, and 18 automotive equipment manufacturers partner with the chipmaker.
Broader restructuring efforts
This latest announcement follows a message sent by CEO Lip-Bu Tan to all employees in April, warning of upcoming layoffs. Tan indicated that these measures were necessary to "rightsize Intel and put it on solid footing for the future." At that time, Bloomberg reported that Intel could potentially cut up to 20% of its workforce.
Intel’s spokesperson declined to provide a copy of the internal memo or specific layoff details, stating that the company does not disclose the number of affected employees based on specific region, location, or business unit.
This strategic realignment underscores Intel’s commitment to optimising its operations and focusing on its most profitable and promising segments amidst a challenging economic landscape.
Sources
- Intel to shutter its automotive business, lay off department employees, Manufacturing Dive.
