Intel today began implementing its latest wave of layoffs in Israel. Sources close to the matter have told "Globes" that many dozens of employees in Israel were today summoned to hearings and this will grow to hundreds of Intel Israel's 9,300 employees.
The hearings will take place next week and it will then become clear how many Intel Israel employees will ultimately be fired, how many will receive early retirement offers, and how many will keep their jobs or move to another position. Estimates are that Intel will lay off between 15% and 20% of its manufacturing division employees worldwide and many thousands more R&D employees at middle management levels, as part of new CEO Lip-Bu Tan's streamlining plan to make Intel a leaner and more efficient company, which can compete with its rivals.
After the layoffs, Intel Israel is expected to have less than 9,000 employees and perhaps even stabilize at 8,500 people - a similar number to its 2012 headcount, with less than 4,000 employees at its manufacturing plant in Kiryat Gat.
Harm to manufacturing plants
What distinguishes the current wave of layoffs from previous waves of layoffs last year is the substantial damage to Intel's manufacturing plants worldwide, including the plant in Kiryat Gat. Employees in Israel say, "This is the most extreme wave at the Kiryat Gat plant ever," which has an estimated 4,000 employees. Among workers summoned for hearings or who have informed their colleagues that they are looking for jobs are many who work in various aspects of production, such as shift managers, operations, safety, and logistics and laboratory personnel in Haifa. Several engineers in Jerusalem have also been laid off.
Enlarged retirement packages and bonuses
Intel Israel employees have been summoned to meetings where they were offered bonuses including increased early retirement packages of several salaries to encourage them to take voluntary retirement. If they are not interested in this, they are entitled to receive a hearing process as is customary before a dismissal process. This is in contrast to previous rounds of layoffs at Intel in which all employees were offered voluntary retirement plans, without informing those set for hearing procedures and layoffs.
As is customary in layoff rounds in recent years at Intel, the company offers between a single number of salaries and up to 19 salaries in the retirement package, in direct proportion to the employee's seniority. Theoretically, an employee who earns NIS 40,000 a month and has been employed by the company for 20 years could receive a pre-tax retirement bonus of NIS 760,000. Employees requesting a hearing anyway, receive a standard hearing, and if Intel is not convinced to keep them can be fired without a special retirement package.
The wave of layoffs is global and includes Intel facilities worldwide. In Folsom, California, 54 people will be laid off, and in Santa Clara - Intel's headquarters in the southern San Francisco Bay Area - 217 people will be laid off. In Ireland, Intel's main manufacturing plant outside the US today, 194 workers will be laid off. The layoff rate at the Irish plant will be only 4% - low by global standards, likely due to the great importance of the plant to Intel because it produces the company's latest chips - 3 and 4 nanometer chips.
The Intel plant in Israel is also a flagship plant, but production here is on a decline with slightly older technology: 7 and 10 nanometers. The plant in Kiryat Gat was praised by Intel executives last April, and has even been equipped with production machinery that allow it to manufacture using the most advanced technology. But according to a study by research firm RISE, after reaching an all-time high in sales of $8 billion in 2022, sales at the Kiryat Gat chip plants fell below $6 billion in 2023. Intel has not yet published data on its production in Israel last year. According to the Rise report, the number of employees in Kiryat Gat peaked in 2019 at 4,500, and gradually fell to about 4,000 in 2023.
The layoffs are part of Tan's efforts to flatten the hierarchy in the company and cut middle management layer, and due to Intel's lack of clarity on its new production process - 1.8 nanometer chips and afterwards 1.4 nanometers, and the ongoing effort to add chip giants such as Nvidia, Qualcomm and Amazon as customers.
No response from Intel has been forthcoming.
Published by Globes, Israel business news - en.globes.co.il - on July 7, 2025.
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