By David Shepardson
WASHINGTON (Reuters) – On Wednesday, Republican Senator Rick Scott requested further clarification from Intel CEO Pat Gelsinger regarding the company’s decision to cut over 15,000 jobs, despite being slated to receive nearly $20 billion in U.S. grants and loans aimed at bolstering chip production.
In a letter obtained by Reuters, Scott expressed concerns over whether the Commerce Department’s planned awards lacked sufficient safeguards to ensure taxpayer funds were allocated to companies that could meet rigorous standards for U.S. manufacturing and job creation.
In May, the Commerce Department announced a preliminary agreement to provide Intel with $8.5 billion in grants, up to $11 billion in loans, and access to a 25% investment tax credit. However, the finalization of this chip production award is still pending.
The Commerce Department declined to comment on Scott’s letter, and Intel has yet to respond to requests for comment.
In May, the Commerce Department announced that funding would support the creation of over 10,000 manufacturing jobs and nearly 20,000 construction jobs for projects in Arizona, New Mexico, Ohio, and Oregon.
Earlier this month, Intel revealed plans to cut costs by $10 billion in 2025 and reduce its workforce by more than 15%, with the majority of layoffs occurring this year.
At the time, CEO Pat Gelsinger noted that Intel’s workforce is 10% larger than it was in 2020, despite the company’s revenue being $24 billion higher that year compared to 2023. He emphasized the need for fewer employees at headquarters and more in the field to support customers.
Senator Scott has called on Intel to specify the number of U.S. employees who will be affected by the layoffs and to clarify whether these cuts will impact Intel’s planned semiconductor manufacturing investments.
“What is Intel aiming to achieve with these job cuts, and why have billions of U.S. taxpayer dollars in investments not been enough to prevent these layoffs?” Scott questioned.
(Report by David Shepardson; Edited by Jamie Freed)