US senator presses Intel CEO for chip giveaway 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 despite receiving nearly $20 billion in US grants and loans to boost chip production.

In a letter seen by Reuters, Scott questioned whether the Commerce Department’s planned awards failed “to include real values ​​that would protect taxpayer dollars from going to companies that could not meet high standards for U.S. manufacturing and job creation”.

The Commerce Department in May announced a preliminary agreement for $8.5 billion in grants and up to $11 billion in loans to Intel, as well as access to a 25 percent investment tax credit. The token prize has not been completed.

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 funding will support the creation of 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 in 2025 and cut its workforce by more than 15 percent, with most of the exits completed this year.

Gelsinger said at the time that Intel’s workforce was 10 percent larger than it was in 2020, when its revenue was $24 billion higher than in 2023, and it needed fewer people at headquarters and more in the field to support customers.

Scott wants Intel to detail how many US employees will lose their jobs and whether the cuts will impact Intel’s planned investment in semiconductor manufacturing.

“What is Intel trying to achieve with these job cuts and why have billions of US taxpayer dollars in investment not been enough support to avoid the need for layoffs?” Scott asked.

(Reporting by David Shepardson; Editing by Jamie Freed)