Intel Corp. plans to shut down its automotive business, the company confirmed Thursday morning.
The move is the latest step in the chipmaker’s downsizing under CEO Lip-Bu Tan. The company will fulfill existing customer contracts, but will lay off “most” employees working in Intel’s automotive group, The Oregonian/Oregon Live initially reported after receiving an internal memo about the decision this week.
“We are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers,” the company said in an emailed statement.
“As part of this work, we have decided to wind down the automotive business within our client computing group,” Intel said in the statement. “We are committed to ensuring a smooth transition for our customers.”
While the company provided no layoff details, reductions have started to take place. In California, Intel recently notified 107 employees in Santa Clara of layoffs taking effect in mid-July, according to state WARN fillings.
Details about Intel’s automotive chipmaking business are not disclosed in earnings reports, but the broader client computing group is a significant part of the company. It generated $7.6 billion in the first quarter, comprising roughly half of Intel’s revenue.
Approximately 50 million vehicles currently use Intel processors and 18 automotive equipment manufacturers partner with the chipmaker for its technology, according to the company’s website.
In April, Tan sent a message to all employees, warning them of upcoming layoffs in a move to rightsize Intel and put it on “solid footing for the future.” That same week, Bloomberg reported that Intel could cut up to 20% of its workforce.
An Intel spokesperson declined to provide a copy of the internal memo given to employees about Intel’s move to shutter its automotive group. They also declined to provide layoff details, saying “Intel does not disclose the number of affected employees based on specific region, location or business.”
