Intel Shuts Automotive Business Amid 20% Workforce Cut

Intel is set to shut down its automotive business, according to a recent report. The company informed employees through a memo distributed on Tuesday, stating that it is refocusing on its core client and data center portfolio. Intel will fulfill existing customer commitments but will lay off the majority of its automotive business workforce.

The automotive unit, which has partnered with notable companies such as Stellantis and U.S. EV startup Karma, has not been a significant revenue driver for Intel. The company's financials for this sector are not separately reported in its quarterly earnings. Intel's majority stake in self-driving car company Mobileye remains unaffected by this decision.

This move is part of a broader downsizing effort by Intel's CEO Lip-Bu Tan, aimed at aligning the company's operations with its declining sales and weak outlook. Earlier this month, Intel announced plans to reduce its manufacturing workforce by up to 20% starting next month, indicating that even core businesses are not immune to these cuts.

Intel's decision to shut down its automotive business reflects a strategic shift towards its core competencies in client and data center technologies. The company's automotive unit, while innovative in its partnerships and technological advancements, has not contributed significantly to Intel's overall revenue. This refocusing aligns with the broader industry trend of tech giants streamlining their operations to enhance efficiency and profitability.

The layoffs at Intel's automotive business are part of a larger wave of job cuts across the company. This downsizing effort is aimed at matching Intel's operational scale with its current market performance and financial outlook. The company's decision to prioritize its core businesses underscores its commitment to maintaining competitiveness in the rapidly evolving tech industry.

Intel's automotive business has been involved in partnerships with major automotive companies, including Stellantis and Karma, to integrate telematics, cloud, and AI infrastructure into vehicles. Despite these collaborations, the unit has not been a major revenue contributor, leading to the decision to shut it down. This strategic move allows Intel to concentrate on areas where it has a stronger market presence and potential for growth.

Intel's decision to shut down its automotive business is a significant step in its ongoing efforts to streamline operations and focus on core competencies. The company's automotive unit, while innovative, has not been a major revenue driver, and its financials are not separately reported in quarterly earnings. This move is part of a broader downsizing effort by Intel's CEO Lip-Bu Tan, aimed at aligning the company's operations with its declining sales and weak outlook. The layoffs at Intel's automotive business are part of a larger wave of job cuts across the company, reflecting a strategic shift towards its core client and data center technologies.