A US senator has reportedly demanded explanations from Intel CEO Pat Gelsinger regarding the company’s decision to lay off over 15,000 employees, despite receiving nearly $20 billion in government subsidies for chip production. The senator seeks details on how many US jobs will be affected and whether these layoffs will impact Intel’s planned investments.
What does Intel hope to achieve with these job cuts, and why haven’t billions of U.S. taxpayer dollars in investments been enough to prevent layoffs?” Republican Senator Rick Scott asked in a letter to Gelsinger, according to Reuters.
Scott also questioned whether the Commerce Department’s planned awards lacked proper metrics to ensure taxpayer money is not given to companies that fail to meet high standards for US manufacturing and job creation.
Intel awarded up to $8.5 billion in CHIPS Act funding.
In March, the White House announced that Intel has been awarded up to $8.5 billion in CHIPS Act funding to boost semiconductor manufacturing in the US. Intel is also eligible for an additional $11 billion in loans and a 25% investment tax credit, though the chip award has yet to be finalized.
In May, the US Commerce Department stated that this funding would support the creation of over 10,000 manufacturing jobs and nearly 20,000 construction jobs for projects in Arizona, New Mexico, Ohio, and Oregon.
This month, Intel said that as part of its $10 billion cost-cutting plan for 2025, it will lay off almost 15% of its workers.
The company will also decrease its R&D and marketing expenses by billions annually through 2026 and will restructure to eliminate “non-essential work.”