US Senator presses Intel CEO over chip allocation after job cuts plan

By David Shepardson

WASHINGTON (Reuters) – Republican Senator Rick Scott on Wednesday asked Intel CEO Pat Gelsinger for more details on the company's plans to cut more than 15,000 jobs even as it is set to receive nearly $20 billion in U.S. grants and loans to boost chip production.

In a letter seen by Reuters, Scott questioned whether the Commerce Department's planned awards lacked “real-world standards that would prevent taxpayer dollars from going to companies that cannot meet high standards for U.S. manufacturing and job creation.”

The Commerce Department announced a tentative agreement in May for $8.5 billion in grants and up to $11 billion in loans for Intel, as well as access to a 25 percent investment tax credit. The final award of the chips has not yet been made.

The agency declined to comment on Scott's letter, and Intel did not immediately respond to requests for comment.

The Commerce Department said in May that the funds will help create more than 10,000 manufacturing jobs and nearly 20,000 construction jobs for projects in Arizona, New Mexico, Ohio and Oregon.

Intel announced this month that it will cut costs by $10 billion and reduce its workforce by more than 15 percent by 2025, with most of the layoffs expected to occur this year.

Gelsinger said at the time that Intel's workforce was 10% larger than in 2020, when revenue was $24 billion higher than in 2023, and he needed fewer people at headquarters and more in the field to serve customers.

Scott wants detailed information from Intel on how many U.S. employees will lose their jobs and whether the cuts will impact Intel's planned investments in semiconductor production.

“What is Intel trying to achieve with these job cuts and why have billions of dollars of investment by U.S. taxpayers not been enough to avoid layoffs?” asked Scott.

(Reporting by David Shepardson; Editing by Jamie Freed)