Intel is making a clean break from the road. In a decisive move to sharpen its focus and rein in spending, the tech giant has confirmed it will shut down its automotive unit and lay off most of the employees working in that division. This latest decision is part of a growing list of sweeping changes under Intel’s new CEO, Lip-Bu Tan, who is steering the company through one of its most aggressive restructuring efforts in years.
Saying Goodbye to a Niche Operation
On Tuesday morning, Intel told staff that its architecture-based automotive business — a relatively small part of the company — would be discontinued. While the division never held a leading role in Intel’s overall portfolio, the company has long promoted the fact that its processors are found in over 50 million vehicles worldwide. These chips have played roles in electric vehicle technologies, driver assistance systems, and performance optimization tools.
However, Intel says it’s ready to exit the automotive market to concentrate more fully on its mainstay businesses: client computing and data centers.
“We are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers,” the company said in a statement shared with employees and reported by The Oregonian/OregonLive. “As part of this work, we have decided to wind down the automotive business within our client computing group.”
Intel has committed to honoring its existing automotive contracts, but made it clear that most employees in the division will be let go as operations wind down.
This doesn’t affect Mobileye, Intel’s Israel-based autonomous driving subsidiary. Intel holds a majority stake in Mobileye, which operates independently and remains active in developing self-driving car technologies.
The Tan Era: Cuts, Closures, and Caution
When Lip-Bu Tan took over as Intel’s CEO in March 2025, he inherited a company facing declining revenue and mounting pressure from competitors. Though Tan hasn’t yet publicly laid out a complete turnaround strategy or spoken to the press, his actions behind the scenes suggest a radical restructuring is underway — one aimed at making Intel leaner, faster, and more efficient.
In an internal memo earlier this year, Tan warned employees to expect “several months” of layoffs. The closure of the automotive unit is now the most visible example of that warning becoming reality.
But it’s not the only one.
Earlier this month, Intel told workers in its manufacturing arm — historically one of the company’s most critical divisions — that it plans to cut up to 20% of jobs starting in July. That’s a dramatic rollback for a department long considered central to Intel’s success.
Marketing Makeover: Outsourcing to Accenture
Intel’s internal shake-up doesn’t stop at operations. Just last week, the company announced another major shift: it will outsource most of its marketing responsibilities to Accenture, a global consulting firm. The move is designed to leverage artificial intelligence and third-party expertise to market products more effectively.
As a result, more layoffs are expected in the marketing division next month.
These decisions suggest that Tan is betting on external partnerships and automation to streamline Intel’s core functions — a strategy that mirrors broader trends across the tech industry. Still, the suddenness and scope of the changes have left many inside the company bracing for what could come next.
Slashing Costs, But Where’s the Competitive Edge?
Intel’s internal realignment may help its bottom line in the short run, but some analysts remain skeptical about how these changes will improve the company’s standing in a highly competitive chip industry. For years, rivals like AMD and ARM Holdings have been chipping away at Intel’s dominance in personal computers and data centers with more energy-efficient, better-optimized chip designs.
And when it comes to artificial intelligence — the fastest-growing market in the tech sector — Intel is lagging far behind. Nvidia currently owns the lion’s share of the AI chip market, and while Intel has signaled interest in catching up, it has yet to deliver a compelling offering.
That raises an important question: can a smaller, more efficient Intel become a stronger innovator? Or will the cuts leave it too thin to compete with more agile players?
