Intel Halts Automotive Business, Layoffs Begin

Intel Discontinues Automotive Architecture Business

Intel is ceasing operations of its automotive architecture division and implementing workforce reductions affecting a significant portion of its personnel. This action is part of a larger restructuring initiative within the semiconductor manufacturer.

Initial Reports and Confirmation

The initial report of this restructuring surfaced in The Oregonian/Oregon Live, referencing an internal communication distributed to employees on Tuesday morning. Intel subsequently confirmed to TechCrunch that the decision to discontinue the automotive business had been communicated internally.

Company Statement on Strategic Refocus

According to a statement released by spokesperson Cory Pforzheimer, Intel is prioritizing its core client and data center portfolios. This strategic shift aims to strengthen product offerings and better serve customer needs.

“As part of this work, we have decided to wind down the automotive business within our client computing group,” Pforzheimer stated. “We are committed to ensuring a smooth transition for our customers.”

Employee Impact

Intel has chosen not to disclose the precise number of employees impacted by these changes, citing policy regarding regional, locational, or business-specific details.

Automotive Business Overview

While not a primary revenue driver for Intel, the automotive division was actively involved in the development of automated vehicle technologies and the evolving landscape of “software-defined vehicles.”

Past Investments and Acquisitions

Intel made substantial investments in the automotive sector, particularly during the early stages of autonomous vehicle technology around 2015. The company’s venture capital arm pledged $250 million towards automotive tech initiatives.

Key acquisitions included Mobileye in 2017 for $15.3 billion, intended to bolster its self-driving capabilities. Mobileye later became an independent, publicly traded entity with Intel retaining a major stake.

In 2020, Intel further expanded its automotive presence by acquiring Moovit for $900 million.

Recent Developments and CES 2025

These layoffs follow a demonstration of Intel’s automotive technology at CES 2025, held six months prior. The division had been actively promoting its software-defined vehicle technology to automakers.

This included an AI-enhanced system-on-chip (SoC) designed for automotive applications, slated for production by the end of 2025. The SoC was initially unveiled at the Shanghai Auto Show in April.

Warning Signs and Broader Layoffs

Concerns regarding the division’s future emerged in April, coinciding with meetings with Chinese automakers at the Shanghai Auto Show. New CEO Lip-Bu Tan cautioned Intel employees about potential layoffs company-wide due to declining sales and a challenging market outlook.

Intel Foundry Reductions

Earlier in the month, Intel announced plans to reduce its workforce in the Intel Foundry division by 15% to 20%, beginning in July. Intel Foundry is responsible for the design, manufacturing, and packaging of semiconductors for external clients.