Intel to Shut Down Another Division and Cut Jobs

According to reports, Intel has announced the phased shutdown of its automotive business unit, marking a strategic shift as the company realigns its focus on core operations. In a memo to employees on Tuesday morning, Intel stated it would fulfill all existing obligations to automotive customers but will lay off the majority of the workforce within this division.

"As previously communicated, we are refocusing our strategy around our core client and data center businesses to strengthen our product roadmap and better meet customer needs," the company explained. "As part of this effort, we have made the decision to wind down the automotive business under the Client Computing Group. We remain committed to ensuring a smooth transition for our customers."

While automotive technologies have played a supporting role in Intel's portfolio, they have not been central to its long-term growth plans. The company did not disclose revenue or employee figures for the division, though it has reported that Intel processors are used in over 50 million vehicles globally. These chips have supported functions ranging from electric vehicle performance to driver information systems.

However, the automotive chip market has become increasingly competitive, with rivals like Qualcomm and NVIDIA securing larger market shares and leading in innovation. Facing challenges in gaining traction and market relevance, Intel has opted to exit this space.

Importantly, this decision does not impact Mobileye, the Israeli autonomous driving technology company in which Intel holds a majority stake. Mobileye continues to operate independently and remains a key player in the self-driving ecosystem.

This move comes amid broader cost-cutting measures initiated by Intel's new CEO Lip-Bu Tan. In April, Tan warned of a multi-month restructuring phase in response to declining sales and a weak revenue outlook. Since assuming leadership in March, Tan has not publicly detailed his strategic vision but has emphasized streamlining operations and enhancing efficiency to drive innovation.

Industry analysts suggest this withdrawal from the automotive sector aligns with Intel's recent efforts to address performance pressures in its PC and data center businesses—two areas that remain central to the company's future growth and resource allocation.