Intel surprisingly shuts down key division, makes huge cuts | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Recently, Intel (INTC) has been making drastic moves to revamp its business after generating disappointing sales and revenue over the past few financial quarters.

The chipmaker has been falling behind its competitors, such as IBM, Samsung and Nvidia, due to its failure to innovate its chip manufacturing processes.

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In its latest earnings report, Intel revealed that it faced a net income loss of roughly $887 million during the first few months of this year, while overall revenue remained flat year-over-year and product revenue dipped by 3%.

During an earnings call in April, Intel CEO Lip-Bu Tan said that the company needs to “fundamentally transform” its culture and operations. He said that “organizational complexity and bureaucracies have been suffocating the innovation and agility” the company needs to win.

In response to these challenges, he announced a new cost-cutting initiative that involves Intel saving $17 billion in 2025 and $16 billion in 2026 through several efforts, such as job cuts.

In an email sent to employees in April, Tan said that the layoffs are “critical” for the company’s future and will happen “quickly” over the next few months.

“There is no way around the fact that these critical changes will reduce the size of our workforce,” said Tan in the email. “As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future. This will begin in Q2 and we will move as quickly as possible over the next several months.

Intel has been making layoffs.

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Intel makes a drastic move

After Intel confirmed last week that it will be laying off 10,000 of its factory workers, about 15% to 20% of its workforce, it has just revealed that it is shutting down its automotive business, which will also result in layoffs, according to a new report from Oregon Live.

“Intel plans to wind down the Intel architecture automotive business,” said the company in a June 24 message to employees.

The company said it will lay off “most” employees in its automotive department, which develops automotive chips used in about 50 million vehicles.

“We are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers,” said Intel in a statement to Oregon Live. “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.”

Intel’s latest round of layoffs reflect a concerning trend

The move from Intel comes as the automotive industry is being hammered by layoffs, amid President Donald Trump’s tariffs and shifts in customer behavior.

In April, President Donald Trump imposed a 25% tariff on foreign-made cars and an additional 25% tariff on imported car parts.

More Labor:

In response to Trump’s tariff announcement, Stellantis temporarily laid off 900 workers at five U.S. facilities that same month.

General Motors also temporarily laid off 700 workers in the U.S. and Canada in April due to waning demand for electric vehicles.

In May, after reporting weak sales and profits, Nissan reportedly began planning layoffs that will impact 10,000 jobs globally, in addition to the 9,000 global job cuts it announced in 2024.