SANTA CLARA, Calif. — Intel Corp. is preparing to cut more than 20% of its workforce in a sweeping restructuring effort, according to a Bloomberg report citing unnamed sources familiar with the matter. The layoffs, expected to be announced as early as next week, could impact thousands of employees as the semiconductor giant grapples with slowing demand and fierce competition in the chip industry.

The reported cuts come amid Intel’s push to reduce costs and refocus on core businesses, including its foundry operations and AI-driven processors. If confirmed, this would mark one of the largest workforce reductions in the company’s history, surpassing the 12,000 jobs eliminated in a 2016 restructuring.

Strategic Shift Amid Market Pressures

Intel has faced mounting challenges in recent years, including losses in market share to rivals like AMD, NVIDIA, and Taiwan Semiconductor Manufacturing Co. (TSMC). The company’s pivot toward contract chip manufacturing and AI accelerators has yet to offset declining PC and data center sales.

Analysts suggest the layoffs could save Intel billions annually but warn of short-term turbulence. "This is painful but necessary for Intel to stay competitive," said TechInsights analyst Daniel Kim. "They’re betting big on foundry and AI, but execution risks remain."

Employee Uncertainty and Industry Impact

Internal memos reviewed by Bloomberg indicate that cuts will span multiple divisions, with sales, marketing, and legacy hardware teams expected to bear the brunt. Some employees took to LinkedIn to express concerns, with one writing, "The mood here is grim. No one knows who’s safe."

The news follows Intel’s *$8 billion cost-cutting plan* announced last year, which included divestments and paused expansions. CEO Pat Gelsinger has repeatedly emphasized "disciplined spending" but avoided confirming layoff specifics during last month’s earnings call.

Market Reaction

Intel shares rose 2.3% in after-hours trading following the report, reflecting investor optimism about cost reductions. However, labor groups criticized the move, with the Silicon Valley Workers Alliance calling it "another example of profit over people."

Intel declined to comment on "rumors," but sources say formal announcements could coincide with its Q2 earnings report on July 25.