📰 What’s Happening?
Intel, Oregon’s second-largest private employer, just announced a massive workforce reduction by 15%. This means about 15,000 jobs globally are on the chopping block, and Oregon could lose up to 3,000 jobs if cuts are evenly distributed.
💥 The Impact on Oregon
Location: Hillsboro, Oregon
Possible Job Cuts: Up to 3,000
Reason: To save $10 billion by 2025, as stated by CEO Pat Gelsinger.
Intel, which employs nearly half of its U.S. workforce in Oregon, is facing a significant upheaval. This is particularly shocking after the company announced a $36 billion expansion of its Hillsboro chipmaking campus just a few months ago.
📉 Financial Woes
- Second Quarter Revenue: Down 1% year-over-year.
- Third Quarter Forecast: Potentially down by 8%.
- Wall Street Reaction: Stock plummeted by over 25%, the worst drop in half a century.
- Loss: $1.6 billion between April and June, a stark contrast to a $1.5 billion profit the previous year.
💡 Why the Cuts?
Intel is struggling to keep pace with competitors, especially in AI chip development. Despite receiving substantial CHIPS and Science Act funding from the Biden administration, the company is finding it hard to sustain its spending without accruing unsustainable debt.
CHIPS and Science Act Funding:
- Direct Funding: $8.5 billion
- Loans: $11 billion
- Expansion Projects: Aimed at creating over 10,000 manufacturing jobs and 20,000 construction jobs across Oregon, Arizona, New Mexico, and Ohio.
However, Intel risks losing some of this funding if it doesn’t meet the milestones required by the CHIPS Act.
📊 Expert Insight
Mike Rogoway, tech business reporter for The Oregonian, explains that Intel felt compelled to make these cuts to avoid taking on unsustainable debt. This decision is seen as crucial for securing the company’s future despite its challenging position.
🚀 Moving Forward
As Intel navigates these turbulent times, the focus will be on stabilizing its finances and staying competitive in the rapidly evolving tech landscape. For Oregon, this means bracing for significant job losses and the ripple effects on the local economy.
Stay tuned to OpenSeen for more updates on this unfolding story. 📰💼