Intel will shut down its small automotive business and lay off the majority of the workers in that segment, the latest step in the chipmaker’s dramatic downsizing.

“Intel plans to wind down the Intel architecture automotive business,” the company told employees Tuesday morning in a message viewed by The Oregonian/OregonLive. The company said it will fulfill existing commitments to customers but will lay off “most” employees working in Intel’s automotive group.

“As we have said previously, we are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers,” Intel said in a written statement to The Oregonian/OregonLive. “As part of this work, we have decided to wind down the automotive business within our client computing group. We are committed to ensuring a smooth transition for our customers.”

Automotive technology isn’t one of Intel’s major businesses and the company doesn’t report the segment’s revenue or employment. But online, the company boasts that 50 million vehicles use Intel processors. Intel says its chips can help enable electric vehicles, provide information to drivers and optimize vehicles’ performance.

Intel also owns a majority stake in the Israeli company Mobileye, which develops technology for self-driving cars. It doesn’t appear the closure of Intel’s automotive group will directly affect Mobileye’s operations.

In April, new CEO Lip-Bu Tan warned employees of “several months” of layoffs in response to falling sales and a bleak revenue outlook. Tan hasn’t publicly divulged a strategy for reviving Intel and hasn’t given any media interviews since Intel hired him in March, but he has indicated that he hopes a smaller, more efficient company could be more innovative.

Intel hasn’t announced any of Tan’s changes publicly, but word has been dribbling out internally over the past few weeks.

Intel notified manufacturing employees this month that it plans to slash the workforce in that business unit by as much as 20%, beginning in July. That’s a major step back in one of Intel’s core businesses.

Last week, Intel told marketing employees that it will outsource its marketing to the consulting firm Accenture. That will trigger more layoffs next month as Intel bets that contractors using artificial intelligence will be more effective in marketing the company’s products.

The cutbacks already in motion, and others still in the planning stages, figure to substantially lower Intel’s spending and reshape its fundamental operations.

The company hasn’t articulated, though, how those cost cuts will make Intel chips more competitive with designs from rivals AMD and ARM Holdings, which are taking market share in the PC and data center businesses. And in the long run, Intel must find a way to break into the business of artificial intelligence, a fast-growing market dominated by Nvidia.

— Mike Rogoway covers Oregon technology and the state economy. Reach him at mrogoway@oregonian.com or 503-294-7699.

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