U.S. Semiconductor Titan Intel Cuts 1,000 Jobs in Israel

(MENAFN) US semiconductor titan Intel is executing a significant workforce reduction and operational cutbacks at its key manufacturing facility in Kiryat Gat, southern Israel, underscoring severe structural difficulties confronting the company both in the region and worldwide.

A comprehensive investigation by Israeli media reveals that Intel’s employee count at the Kiryat Gat plant has dropped from roughly 5,000 workers in 2019 to about 4,000 by the close of 2023.

This downsizing comes as part of Intel’s sweeping global overhaul following a drastic revenue slump—from $78 billion in 2020 to $53 billion in 2023—and a staggering net loss of $18.7 billion during the same timeframe.

The reorganization plan includes upgrading production lines at the Fab 28 facility with increased automation, which has resulted in laying off nearly 200 factory workers along with about 10% of research and development personnel. Established in 1996, Fab 28 was once a standout industrial site, responsible for cumulative exports valued at $86 billion, representing 3–3.5% of Israel’s yearly export totals.

The report emphasizes intensifying competition from Taiwan’s TSMC, which now leads the market in advanced chip manufacturing, serving major clients such as Apple, Nvidia, and Amazon.

Uncertain returns
The media outlet further notes that Intel has benefited from government grants totaling around $1.5 billion over the years. Recently, Israeli authorities approved an additional $3.2 billion funding package for a new plant—Fab 38—but construction has been paused amid Intel’s ongoing retrenchment.

Despite the halted Fab 38 project and widespread job cuts, Israel’s Finance Ministry and Investment Authority have refrained from imposing penalties on Intel, as financial support remains contingent on pre-established performance targets.

Intel’s retrenchment coincides with the rapid ascent of US rival Nvidia, which unveiled plans to invest $540 million in a large-scale development center in northern Israel, intending to employ 5,000 workers.

Industry watchers interpret this as a pivotal shift in Israel’s technology sector—from conventional chip manufacturing toward AI-centric research and development.

The future scope of Intel’s operations in Israel now hangs in the balance.

In Kiryat Gat, where many families depend directly or indirectly on Intel jobs, anxiety is growing. With Fab 38’s construction suspended and investments cut back, concerns mount over the city’s long-term economic stability.

Although Intel maintains generous benefits, including extended paid leave and severance packages that can exceed $238,000, numerous employees—especially older workers—are uneasy about securing new positions amid a shrinking job market.

MENAFN21072025000045017169ID1109824911