Tech industry faces major layoffs; Intel and Amazon Web Services begin restructuring

Intel, a leading chipmaker, has initiated a substantial layoffs programme, cutting over 5,000 jobs across the United States, with significant impacts in California, Oregon, Arizona, and Texas, as reported by Manufacturing Dive, citing updated Worker Adjustment and Retraining Notification (WARN) filings.

Specifically, the layoffs have doubled in Santa Clara and Folsom, California, affecting a total of 1,935 employees. Reductions began on July 11 in Folsom, California, and on July 15 in Santa Clara, California, reported News18.

Additionally, last month, Intel laid off 107 employees at its Santa Clara headquarters, with layoffs also commencing on July 15. These actions are part of a broader restructuring effort to streamline operations and address financial challenges under the leadership of CEO Lip-Bu Tan, who aims to make Intel a "leaner, faster, and more efficient company."

Intel shuts down automotive chip business
In a strategic move, Intel has decided to shut down its automotive chip division based in Munich, Germany, as noted in an internal memo cited by The Oregonian. The memo indicates that Intel plans to wind down its architecture automotive business, resulting in layoffs for most of the division's workforce.

Reports from last month, referencing CEO Lip-Bu Tan’s internal memo, suggest that Intel planned to reduce its chip manufacturing division by 15%-20%. This significant cut is part of Tan's broader strategy to streamline operations, reduce organisational complexity, and enhance execution to better serve customers, as Intel navigates financial losses.

Amazon Web Services job cuts
Alongside Intel, Amazon has reduced its workforce in the Amazon Web Services (AWS) cloud computing division, laying off at least 100 employees, according to Reuters.

The exact number of job cuts remains undisclosed, but this move follows CEO Andy Jassy's warning that the adoption of generative AI tools would lead to workforce reductions. The layoffs at AWS reflect a broader trend among tech giants, including Microsoft, Meta, and CrowdStrike, which are increasingly leveraging AI to automate tasks and reduce costs.

Industry-wide shift towards AI and automation
The layoffs at Intel and AWS are part of a larger trend in the tech industry, where companies are increasingly adopting artificial intelligence to write software code and automate routine tasks. This shift aims to reduce operational costs and reliance on human labour, reflecting a strategic pivot toward leaner business models in response to rising costs and competitive pressures.

For further details on Intel’s layoffs and restructuring, refer to the official WARN filings or visit Intel’s official communications. For updates on Amazon’s workforce changes, check Reuters or AWS’s official announcements.