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U.S. semiconductor giant Intel has begun a wide-ranging downsizing operation in Israel, cutting jobs and halting expansion plans at its main manufacturing facility in the southern city of Kiryat Gat.
The move comes as part of a global restructuring campaign in response to declining revenues and increased competition.
Intel’s workforce at its Kiryat Gat plant—known as Fab 28—has fallen from around 5,000 in 2019 to approximately 4,000 by the end of 2023, according to a detailed report by Israeli business outlet Globes. The cutbacks include the dismissal of some 200 manufacturing workers, alongside roughly 10% of the plant’s research and development staff.
Fab 28 has historically been a cornerstone of Israel’s tech manufacturing sector. Since opening in 1996, the facility has exported a cumulative $86 billion in chips, accounting for around 3%–3.5% of the country’s total annual exports.
The cutbacks come amid a broader slump in Intel’s global performance. The company’s annual revenue has dropped from $78 billion in 2020 to $53 billion in 2023, during which time it also reported a net loss of $18.7 billion. In response, Intel has accelerated the automation of its production lines and scaled back expansion projects.
One such project is the planned Fab 38 facility, for which the Israeli government had pledged a $3.2 billion grant package. Construction of the plant has since been suspended, with no penalties imposed on Intel as the funding remains conditional on predefined benchmarks.
Intel is estimated to have received around $1.5 billion in Israeli government grants over the years.
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