Intel has decided to shut down its automotive business as part of a broader restructuring effort led by new CEO Lip-Bu Tan, who took over in March 2025. This move aims to refocus the company on its core strengths in client computing and data center products, which are more profitable and central to Intel’s strategy.
The automotive division was a relatively small and less profitable part of Intel’s portfolio, facing rising cost pressures and intense competition, making it unsustainable. Despite having been active in automated vehicle technology and owning a majority stake in Mobileye (which remains unaffected and operates independently), the automotive chip business itself did not generate significant revenue for Intel.
Intel will honor existing automotive contracts but plans to lay off most employees in the division, with layoffs beginning around mid-July 2025. This decision is part of a wider cost-cutting and efficiency drive amid falling sales and a gloomy revenue outlook for the company. CEO Lip-Bu Tan’s restructuring also includes workforce reductions of up to 15-20% across various departments to reduce bureaucracy and improve operational efficiency.
Intel’s exit from the automotive chip market reflects a strategic shift to streamline operations, cut costs, and prioritize its traditional and more profitable areas such as CPUs and data centers under the leadership of CEO Lip-Bu Tan.