Intel announced it plans to cut costs by $10 billion next year. That means letting go of 15,000 roles, or 15% of the company's workforce.
RIO RANCHO, N.M. – Intel announced its plan to cut costs by $10 billion next year, which reportedly includes letting go of 15,000 people.
Sources close to Intel tell KOB 4 they don’t expect that to impact the company’s planned investments in the U.S. They also said Intel is committed to its existing U.S. projects, which they say are on-track. KOB 4 hasn’t seen a WARN notice filed by Intel with the New Mexico Department of Workforce Solutions, which would indicate any mass layoffs in our state.
According to a note sent out to employees Thursday, the majority of the layoffs will happen by the end of this year.
Intel’s latest financial report shows it’s down 1% in its year-to-year earnings. CEO Pat Gelsinger said revenues haven’t grown as expected, making costs high and margins low. He also said that they have yet to benefit from trends like artifical intelligence.
“We must align our cost structure with our new operating model and fundamentally change the way we operate,” Gelsinger said.
The news certainly caught the attention of people in Sandoval County, the home of an Intel facility employing around 3,000 people.
While those employees directly tied to Intel, UNM Associate Professor of Finance Reilly White says there are thousands of other New Mexicans who are indirectly tied to the company.
“Intel is a huge part of the New Mexico economic landscape. It employs directly more than 2,600 workers. Indirectly, another 6,000 New Mexicans have their jobs tied to this,” White said. “Collectively, that’s 1% of our total labor force is either directly or indirectly tied to Intel. In addition, they built that $3.5 billion manufacturing plant earlier this year.”
Layoffs or not, Thursday’s news is already impacting New Mexicans, as Intel’s stock took a nosedive.
“Stocks down over 26%. So, it’s a really big deal.That’s retirement savings for people,” White said. “That’s a lot of money that goes in there too. So there’s other effects of news like this, that even go beyond the question of jobs.”
Sandoval County Manager Wayne Johnson believes the facility will be spared because of its uniqueness. It assembles Intel’s chips and packages them, creating the end product rather than creating individual parts.
Johnson also believes it’s a positive sign that Intel has invested so much in New Mexico. From 2021 to now, about 1,200 jobs were added at the facility.
“The other part of the equation is that this is a unique facility for Intel. Now, not only is it unique for them, but it’s the largest advanced packaging plant in the world. And so it does things that the foundry divisions at Intel, don’t do. And it also works with a larger client base. In other words, it’s not just Intel that they work with. So there are some opportunities with this plant, that don’t necessarily exist with their other business units,” Johnson said.
KOB 4 also spoke to Rio Rancho Mayor Gregg Hull. He said they won’t know how this will impact the city just yet, but because of the demand here, he’s not sure how it’ll impact the state, if at all.
