Intel reportedly chips away at fab workforce – but hey, maybe there's a tax break coming

Layoffs loom at Foundry biz despite CHIPS Act relief on the horizon

Intel is reportedly set to shed 15 to 20 percent of its fabrication plant staff from next month, blaming company finances for the move, but the chip giant may get a boost from increased tax credits in a draft bill passing through the US Senate.

The maker of PC chips notified employees over the weekend that it intends to start laying them off within weeks, according to a report in local news outlet Oregon Live. It says the details came in a memo it has seen from Naga Chandrasekaran, executive vice president and general manager of Intel Foundry Manufacturing.

"These are difficult actions but essential to meet our affordability challenges and current financial position of the company. It drives pain to every individual," Chandrasekaran reportedly said.

We asked Intel if it could confirm the memo and its content, but the company declined to comment.

Instead, it simply referred us to the statement it gave to Oregon Live, which says: "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."

Earlier reports had pointed to potential workforce cuts of up to 20 percent following the appointment of Lip-Bu Tan as Intel's new chief executive several months ago. He was picked to reverse the mounting losses incurred by Intel's foundry business, and had emphasized the need to streamline the company's operations.

For its last earnings report at the end of Q1 2025, the semiconductor giant reported revenue of $12.7 billion, flat year-on-year, and a loss of $887 million.

If Intel confirms the layoffs, they follow the loss of more than 16,000 staff last year, or at least 15 percent of its workforce, under previous CEO Pat Gelsinger.

But perhaps the firm can console itself with a potential boost from the CHIPS Act. A draft tax bill with the US Senate proposes a boost to the investment tax credit for semiconductor manufacturers that would raise it from 25 to 30 percent of the total investment, according to numerous reports.

Companies starting projects by the end of 2026 can continue claiming construction credits thereafter, according to reports. This measure is touted as a policy to encourage recipients to get started as soon as possible, while recognizing that fabrication plants can take several years to build.

Intel was one of the largest beneficiaries of CHIPS Act funding, winning a total award of $7.86 billion toward the end of last year, although this came with strings attached. The chipmaker was required to retain control of its foundry biz and fabrication plants, which it was reportedly considering selling.

The Trump administration had previously indicated that it wanted to renegotiate the CHIPS Act awards, so that the companies paid more of their own cash. Just this month, Commerce Secretary Howard Lutnick suggested that semiconductor firms should be prepared to return to the negotiating table, while the president himself called for all the funding to be cancelled earlier this year, and the remaining cash used to offset national debt. ®