- US Republican Senator Rick Scott has queried Intel’s CEO over plans to cut over 15,000 jobs, despite the company’s receipt of nearly $20 billion in US grants and loans intended to boost semiconductor production and create jobs.
- Scott has questioned the Commerce Department’s awards, fearing a lack of metrics to protect taxpayer funds from companies unable to meet manufacturing and job creation standards.
OUR TAKE
Senator Scott’s concerns highlight the need for transparency and accountability in government funding of private enterprises. It’s crucial to ensure taxpayer money supports job creation and economic growth, not job cuts. The outcome of this inquiry could shape future policies on public-private partnerships.
–Vicky Wu, BTW reporter
What happened
US Republican Senator Rick Scott has written to Intel CEO Pat Gelsinger, seeking further details on the firm’s intentions to reduce its workforce by over 15,000 employees, despite being in line to receive nearly $20 billion in US grants and loans aimed at boosting semiconductor production. In his letter, Scott expressed concerns over whether the Commerce Department’s proposed awards had failed “to include real metrics that would protect taxpayer dollars from going to companies that could not meet high standards for U.S. manufacturing and job creation.”
In May, the Commerce Department unveiled a preliminary deal to provide Intel with $8.5 billion in grants and up to $11 billion in loans, along with a 25% investment tax credit. This funding was intended to support over 10,000 manufacturing jobs and nearly 20,000 construction jobs for projects in Arizona, New Mexico, Ohio and Oregon.
Intel recently disclosed plans to reduce costs by $10 billion in 2025 and cut its workforce by more than 15%, with most layoffs expected to occur this year. According to Gelsinger, Intel’s workforce is now 10% larger than in 2020, despite a significant drop of $24 billion in revenue. The company aims to streamline operations by reducing headcount at headquarters and increasing customer support personnel.
Also read: Intel plans to cut 17,500 jobs to reduce costs
Also read: Intel sued by shareholders over concealed foundry issues
Why it’s important
Senator Scott wants Intel to provide details on the number of US-based employees who will be affected by the layoffs and whether these reductions will have any bearing on the company’s planned investments in semiconductor manufacturing. “What is Intel trying to achieve with these job cuts, and why have billions of U.S. taxpayer dollars in investments not been sufficient support to avert the need for lay-offs?” Scott asked.
This situation raises questions about the effectiveness of government incentives in safeguarding jobs and bolstering domestic manufacturing, as well as the accountability of corporations that receive public funds. The outcome of this correspondence could have implications for future policy decisions regarding the allocation of public funds to private enterprises and the conditions attached to such support.
