According to reports, Intel will provide three months of unpaid leave to thousands of employees in Ireland. The company plans to squeeze $3 billion next year to combat a sharp contraction in the global chip industry.
Intel just announced an increased investment in a new facility in Ireland earlier this year. It is reported that the company is still asking employees at the Leixlip factory whether to consider this option, but it has not been enforced.
Intel said it was a “voluntary furlough program.” Asked what would happen if too few or too many employees were actively participating in the program, the company added: “Employees can apply and ultimately the company decides.”
The move comes as major technology companies have experienced a wave of layoffs in recent months, and they all hope to use this measure to control costs in the economic downturn.
Chipmakers have been hit by a rapid downturn in the market, with many issuing weak sales and profit forecasts over the past two years.
Intel warned in October that it was preparing thousands of layoffs to cut costs by as much as $10 billion by the end of 2025 in response to further declines in demand for its chips.
Mobile chipmaker Qualcomm also cut its revenue forecast by a quarter in November as slowing consumer spending hit handset sales. AMD also warned that the company’s PC processor sales will decline by 40%.
Intel expects its manufacturing employees to be furloughed in the first quarter of next year, but has not disclosed how many of Leixlip’s 4,500 workers are eligible.
Ireland is very dependent on large tech and manufacturing companies, which contribute more than half of the local corporate taxes. In the first nine months of this year, Ireland’s corporate tax bill totaled almost 14 billion euros, an increase of nearly 6 billion euros on the same period last year.
Many global tech giants have their European headquarters in Ireland, but Twitter, Meta, Stripe and others are all likely to cut hundreds of jobs locally.
Invest Ireland (IDA) has yet to comment on Intel’s furlough news. But Irish Prime Minister Micheál Martin had previously welcomed Intel’s 12 billion euros in new facilities on top of its 5 billion euro investment pledge. The new facility is expected to create an additional 2,000 jobs.
At the same time, Martin also said that the investment “fully demonstrates the company’s deep and ongoing commitment to Ireland.”
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