Plus: Microsoft readies another wave of Xbox cuts


Semiconductor giant Intel has officially begun a new round of layoffs, following through on CEO Lip-Bu Tan’s warning two months ago that job cuts were “inevitable” as part of a wider restructuring strategy.

The company confirmed in a regulatory filing that the layoffs are scheduled to begin 15 July and will impact a significant portion of its global manufacturing workforce.

Intel plans to cut between 15% and 20% of its chip manufacturing division, a move expected to affect over 10,000 employees globally, spanning 15 chip fabrication plants across 10 countries.

The reductions are aimed at streamlining operations, removing organisational complexity and positioning Intel to regain competitiveness in the increasingly turbulent semiconductor market.

According to a Worker Adjustment and Retraining Notification (WARN) Act notice filed in California last week, 107 employees tied to Intel’s Santa Clara headquarters will lose their jobs.

Affected positions span a wide range of technical and managerial roles, including: 22 physical design engineers; six cloud software architects; six cloud software engineering managers; an AI systems and solutions engineering manager; a vice president of IT for a business unit; and project and product managers across software, engineering and strategic planning.

Additional roles hit include engineering managers in silicon design, system-on-chip logic and design-for-test operations.

“We are taking steps to become a leaner, faster and more efficient company,” an Intel spokesperson said in a statement to Computing’s sister title CRN.

“Removing organisational complexity and empowering our engineers will enable us to better serve the needs of our customers and strengthen our execution.”

Tan, who took the helm at Intel with a mandate to overhaul its operations, said in a public memo in April that the company aimed to reduce operational costs by $500 million this year and $1 billion next year.

“There is no way around the fact that these critical changes will reduce the size of our workforce,” Tan wrote.

He also criticised the company’s bloated management structure, stating that in recent years, some leaders had begun to measure success by the size of their teams.

Employees affected by the layoffs in the California have either received a 60-day notice or a four-week notice with nine weeks of pay and benefits in lieu of further notice, in accordance with legal requirements.

On Monday we reported that Intel is outsourcing its global marketing operation to Accenture and will use more generative AI in support.

Microsoft readies another wave of Xbox cuts

Meanwhile, Microsoft is preparing to enact another round of major job cuts, including within its Xbox gaming division, according to The Verge.

The layoffs, expected as early as next week, will reportedly impact thousands of employees across Microsoft’s broader operations, including sales and marketing teams.

The move comes as Microsoft begins a new fiscal year and seeks to restructure its gaming unit ahead of the next generation of consoles.

According to the report, Xbox operations in certain Central European markets will be wound down as part of the shake-up. One source told The Verge that the distribution model for Xbox in Europe is undergoing a fundamental realignment.

These cuts follow a series of deep job cuts across Microsoft’s gaming and mixed reality divisions over the past 18 months.

In January last year, 1,900 employees were laid off across Xbox and Activision Blizzard. Then in September, 650 more employees were laid off from Xbox division.

In May this year, Microsoft announced that would let go 6,000 employees in a broader workforce reduction.

Further cuts in sales jobs are expected to be announced in July.