Fears for Irish jobs as Intel to cut global workforce

There are fears of possible redundancies at Intel’s Irish operation after the company announced plans to cut around 15,000 jobs globally, the equivalent of 15% of its workforce.

A spokesperson for Intel said the number of impacted jobs will vary across each business unit and in each region.

The company said it is not disclosing a number at this time in relation to what the impact in Ireland may be. Intel employs 4,900 people in Ireland.

After announcing disappointing financial results for the second quarter of the year, Intel said it planned to deliver $10 billion (€9.27bn) in cost savings in 2025.

The majority of the job cuts are expected to be completed by the end of this year.

Shares in the company sank more than 25% at today’s opening on Wall Street after news of the planned job cuts.

In a message to staff, Intel CEO Pat Gelsinger said that next week the company would announce an enhanced retirement offering for eligible employees and broadly offer an application programme for voluntary departures.

“This is painful news for me to share. I know it will be even more difficult for you to read. This is an incredibly hard day for Intel as we are making some of the most consequential changes in our company’s history,” Mr Gelsinger said in his message to staff.

“Our revenues have not grown as expected and we’ve yet to fully benefit from powerful trends, like AI.”

“Our costs are too high, our margins are too low. We need bolder actions to address both, particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected,” he said.

“These decisions have challenged me to my core, and this is the hardest thing I’ve done in my career,” he added.

The US chipmaker remains a major player in the personal computer and server markets, but has struggled to keep pace with the growing demand for chips used in artificial intelligence (AI).

In October 2022, Intel announced a major cost-cutting plan which included thousands of redundancies as it looked to reduce its global headcount from almost 132,000 to just under 125,000.

At its Irish operation, it led to 130 redundancies, pay cuts for senior managers and offers of voluntary unpaid leave to a large portion of its Irish-based workforce.

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Minister for Enterprise, Trade and Employment Peter Burke described the quarterly results announced by Intel as challenging.

He said he is due to meet with Intel executives in about two weeks.

“I am in touch with the company, along with my IDA colleagues, ahead of any specific details being confirmed to employees at Leixlip and Shannon,” Mr Burke said.

He said that while reports from Intel are concerning, he feels the operation in Leixlip is “very solid” and will continue to be a key part of Intel’s core business “right into the future”.

“If you look at the footprint there in Leixlip over a huge body of land, they’ve invested about 17 billion in relation to their Fab34 new state-of-the-art technological advance unit.”

Speaking on RTÉ’s Drivetime, the Minister said that it is a massive investment with high-quality jobs.

He added they were ramping up production lines in their number three and number four technological nodes, “so again that is a good positive sign in relation to it as well”.

He added: “The company’s commitment to Ireland remains solid as they continue a significant stream of investment here”.

He hoped the impact on Ireland would be minimal but would have to wait for the review and for a meeting with Intel.

Intel is central pillar of local economy in Kildare, says minister

Kildare North TD and Minister of State at the Department of Transport James Lawless described Intel as a central pillar of the national economy and local economy in Kildare, especially in Leixlip and surrounding areas.

“Intel has very recently invested in a multi-billion campus expansion at the Fabs in Leixlip,” Mr Lawless said.

“This is a sign of their continued commitment to this location and their operations here.

“Whilst the local impact of Intel’s job cuts is not yet known, I am confident that the company will continue to provide high quality employment and activity here.

“Anyone who is affected by these moves will be supported by state agencies,” he added.

In October last year, Intel officially opened ‘Fab 34’, its latest manufacturing facility at its plant in Leixlip, Co Kildare.

It was part of a €17 billion investment which doubled the company’s manufacturing space in Ireland.

In June, Intel announced the sale of a 49% stake in a joint venture linked to the ‘Fab 34’ facility in Leixlip for €10 billion.

The deal was part of a funding strategy designed to allow Intel to access capital to invest in its global manufacturing operations.

Under the agreement, Intel retained ownership of the plant but the deal allowed the company to unlock and redeploy money to other parts of its business.