After securing tens of billions of dollars from the US Government through the CHIPS act, aimed at boosting the struggling company’s semiconductor manufacturing in America, Intel has made a surprising move by laying off a portion of its workforce.

Intel’s financial performance in recent quarters has been disappointing, with the company revealing a $7 billion loss attributed to its struggling off-spin foundry. Their semiconductor sector is in disarray, Intel’s CPUs lag behind AMD alternatives in terms of both performance and efficiency as Intel themselves are becoming reliant upon TSMC silicon to manufacturer its products.

A spokesperson confirmed to CRN that a new wave of layoffs has been implemented at Intel, affecting the company’s marketing division, though specific details regarding the extent of terminations remain undisclosed.

Intel’s marketing division has gained notoriety for producing deceptive and misleading performance comparisons against competing products. Their most recent embarrassment came with the Intel “Core Truths” initiative, where they criticized AMD for its deceptive naming scheme, potentially misleading consumers into purchasing a current-generation product built on an architecture that is several years old.

Intel’s own new Core Ultra naming scheme follows a similar pattern. The upcoming 15th Generation Core processors, codenamed “Arrow Lake,” will be marketed as the Intel Core Ultra 200 series, while previous-generation Raptor Lake CPUs will be branded as Intel Core 200.

Similar confusion arises with Intel’s Meteor Lake mobility range. For instance, CPUs like the Core Ultra 7 155U processor are based on the brand-new Meteor Lake core architecture, while the Intel Core 7 150U belongs to the previous-generation Raptor Lake product line.

Intel’s restructuring plans were apparent back in 2022 when CEO Pat Gelsinger disclosed the company’s intent to implement widespread cost-cutting measures, aiming to reduce spending by $10 billion amidst weakened consumer demand and company expansion efforts.

In alignment with this strategy, Intel previously separated its foundry division into a distinct entity, a strategic move aimed at bolstering the company’s presence in the semiconductor industry by outsourcing its semiconductors to customers.

With high expectations for Intel Foundry Services (IFS), the division is poised to become a substantial revenue driver for the firm, as Intel aims to position it as the second-largest foundry by 2030.

A decade ago, Intel was at the forefront of technological advancement in the semiconductor industry, outperforming competitors like TSMC, Samsung, and Global Foundries.

However, the company faced setbacks with an ambitious 10nm processing node, which took over half a decade to reach mass production feasibility. During this time, Intel remained on their 14nm process and continued using the Skylake architecture from the 6th Generation of Core CPUs until the 10th.

This delay allowed rivals like TSMC to surpass Intel with more advanced, efficient, and dense processing nodes, with Intel falling further behind the new market leader.

The company has not provided specific figures regarding the total number of employees laid off since then. The only figures disclosed by Intel pertain to individual layoff rounds affecting 50 or more employees within a 30-day period at its offices in California, as mandated by the state’s Worker Adjustment and Retraining Notification (WARN) Act.

The company previously stated that Intel Foundry’s “operating losses are expected to peak in 2024” as it finalizes Gelsinger’s node acceleration plan. The chip manufacturing business aims to achieve break-even operating margins by the midpoint between now and the end of 2030.

Ultimately, Intel aims to achieve 40 percent non-GAAP gross margins and 30 percent non-GAAP operating margins by that time. While layoffs certainly contribute to cost-cutting efforts, it appears that government grants are primarily benefiting Intel executives, as the company struggles with lackluster product rebrands and regressive products.

Their semiconductor sector continues to lag behind the competition, and profitability isn’t expected until around 2027.