Intel is cutting more jobs at its Silicon Valley headquarters as the technology sector shifts its spending to artificial intelligence resources.
In its most recent round of layoffs, the chipmaker notified the state this month that it’s firing about 60 employees at its Santa Clara, California, headquarters.
It remains to be seen whether such cuts by Intel and other big tech companies will cast a shadow on Silicon Valley’s nascent office market comeback. Tech firms such as Amazon and Google are also seeking to reduce costs and shift resources toward fast-growing areas such as artificial intelligence.
Intel said earlier this year that it would reduce its global workforce by nearly a quarter by year’s end.
Over the summer, Intel announced it would downsize its Santa Clara head count by 736, along with more than 300 layoffs at a research and development facility in Folsom, California, outside Sacramento. Shortly thereafter, it laid off nearly 100 employees in Santa Clara and roughly 80 in Folsom.
The local cuts include engineering, marketing and AI-related positions.
In a memo to employees posted on the Intel website, CEO Lip-Bu Tan said the company plans to end the year with a global workforce of about 75,000, which would mark a 22% reduction from the start of 2025. The firm is trying to trim $17 billion in costs for the year.
“We will become a faster, more agile and more vibrant company,” Tan said in the July memo, noting changes will be focused particularly on its foundry operations. “We will eliminate bureaucracy and empower engineers to innovate with greater speed and focus. And we will reduce our costs to enable investments in future growth.”
AI-focused firms are driving new demand for office space, but broader adoption of AI across industries may ultimately reduce office requirements through shrinking workforce sizes and declining job growth, especially in roles traditionally based in offices.
The San Jose office sector has shown signs of a rebound as 2025 draws to a close. Improved tenant interest has led to the highest quarterly leasing activity since 2022. Nevertheless, market volatility and uncertainty remain prominent, noted CoStar. While some Silicon Valley tech leaders, such as Nvidia, have dramatically expanded, “legacy firms like Cisco and Intel have encountered significant competitive pressures from international rivals.”
The San Jose office market’s vacancy rate remains at 15.4%, near its historical peak.