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Intel's retreat is unlike anything it's done before in Oregon

269 points| cbzbc | 8 months ago |oregonlive.com

483 comments

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[+] lordnacho|8 months ago|reply
Intel dropped the ball, and it was the biggest bullet I ever dodged. Even 20 years ago, I felt there was something wrong about the internal culture there, so I turned down the post-internship job offer.

There's a bunch of teams there with three-letter acronyms whose origins have been totally forgotten. Like, nobody knows what LTQ or ASR stands for, or what purpose they have. When you're an intern, you tend to think that the higher-ups know what they're doing, but if you ask for an explanation, you will soon conclude that they don't know either.

People were not working hard enough. At the time Intel's dominance was supreme. They should have been picking up on niche ideas like GPUs and mobile chips, it would have been cheap and adjacent to what they had. Instead, all I heard at the meetings was laughing at the little guys who are now all bigger than Intel. Even my friend in the VC division couldn't get the bosses to see what was happening. People would spend their whole day just having coffee with random colleagues, and making a couple of slides. It's nice to relax sometimes, but when I was there it was way too much of that. There was just way too much fat in the business.

I still have friends there who stayed on. They tell me not to come, and are now wondering how to do the first job search of their professional lives. A couple have moved very recently.

It's very odd that the guy who was famous for saying what upper management should do (set culture) ended up building a culture that has completely failed.

[+] Aurornis|8 months ago|reply
> People would spend their whole day just having coffee with random colleagues, and making a couple of slides. It's nice to relax sometimes, but when I was there it was way too much of that.

I knew a lot of people who got jobs like this after college. I was so very jealous at the time. I was working in a company that was nice, but also wasn’t afraid to tell people when they weren’t meeting expectations. Some of my friends were at companies where they weren’t expected to “ramp up” for the first year. One person I know read “The Four Hour Work Week” and talked his company into letting him work remote, then started traveling the world. He would brag that his entire job was “telling the engineers what to do” and it took him an hour a day because he did it all through email in one sitting.

Years pass, economies evolved, and now it’s harder to get a job. Companies start looking for dead weight and discover people doing jobs that barely contribute, if at all.

A tech company near me looked at their VPN logs (required to interact with their internal services and do any dev work) and discovered a lot of engineers who were only connecting a couple times per month.

By then it’s hard to turn it around. It’s not easy to take people who have become so comfortable not working that the entire idea of urgency is a foreign concept. Ask for some task that should only take an hour or two and they’ll say they’ll have it by early next week. Any request turns into a series of meetings, which have to be scheduled with all participants, which means they can’t start discussing it until Bob is back from vacation next week, so they might have an idea of what’s required by end of month.

At some point you can’t turn it around without making big changes to the people involved. There’s too much accumulated inertia and habit. You have to reorg at minimum and bring in new management, while also making it clear to everyone that their performance is now actually being noticed. It’s hard.

With Intel, I’ve also heard from some ex-employees who left because pay was lagging. Companies with low expectations can feel like they’re getting away with low pay because many people will keep an easy job despite the low pay. It masks the problem, for a while.

[+] ponector|8 months ago|reply
>>It's very odd that the guy who was famous for saying what upper management should do (set culture) ended up building a culture that has completely failed

Is it? Everywhere I worked upper management is taking big about the culture but their taking points are rarely applied to the company.

Like when Facebook says something like "we value your privacy"

[+] gwbas1c|8 months ago|reply
I spent ~2 years at Intel 20 years ago. My experience was kind of similar, although I didn't see the "People would spend their whole day just having coffee with random colleagues" aspect.

I left because I was working on a machine learning project that was a "solution in search of a problem;" and I spent too much time working alone. I was very early in my career and felt like I just wasn't learning enough from my peers.

Overall, I felt like Intel was a positive experience. I do think their biggest problem was that they had to many lifers and didn't have enough "healthy turnover." Almost everyone there started at the beginning of their career, and thus everyone who was mid-late career didn't understand what the rest of the industry was doing.

[+] pjc50|8 months ago|reply
> At the time Intel's dominance was supreme

They are the poster child for "we have a monopoly so we don't have to innovate or even maintain competence". Mind you, how much worse must things be at AMD that they're not winning the x64 war? Eventually the "PC" market is going to get run over by ARM like everything else. Especially now there's a Windows on ARM with proper backwards compatibility.

(although something is very odd with drivers on Windows-ARM, if anyone knows the full story on how to get .inf based 'drivers' working it would be genuinely helpful)

[+] smallmancontrov|8 months ago|reply
Same. I started down the semiconductor path about 15 years ago (physics student, loved my EE classes, loved nanofab class, wanted more) and got warned away by an astonishing number of independent postdocs, interns, and seemingly successful industry contacts who all agreed on one point: the pay was such utter dogshit that one should consider it a passion career like art or music. Some of them saw consulting for the Chinese as their "big ticket light at the end of the tunnel" -- but that got shut down soon enough. I changed directions before getting first hand experience but the R&D job listings tended to support this view. "They pretend to pay us, we pretend to work" seemed to be in the advanced stages at that point.

At least in R&D, from the angle I saw it. Clearly, being stingy wasn't a universal problem: heavy buybacks, ludicrous M&A (in foresight and hindsight), and that $180k average salary in the article sounds completely divorced from the snapshot impression that I got. I don't know what gives, was R&D "salary optimized" to a degree that other parts of the business weren't? Did the numbers change at some point but the culture was already rotten and cynical? Or did I see noise and mistake it for signal? Dunno.

In another world I'd love to have been part of the fight to make 10nm work (or whatever needed doing) rather than working on something that doesn't fully use my skills or in my private opinion contribute as much to humanity, but my employer pays me and respects my time and doesn't steer their business into every iceberg in the ocean, and in the end those things are more important.

[+] no_wizard|8 months ago|reply
I firmly believe intel went from decline (which you can reverse) to terminal (which in a business sense, can be reversed, but it usually isn't) as soon as AMD was able to successfully erode some of their server business, and ARM is now doing the same.

The mountain of money for intel has always been with server chips, as its their high margin chipsets. While they make alot of money on consumer laptops and desktops, its no where near the amount of money they traditionally have made on their server oriented chipsets.

I don't think Intel is likely to come out of this state without something extremely radical happening, and every time they try to do something that could be radical it never has enough time to gestate to work, it always ends up abandoned.

[+] sellmesoap|8 months ago|reply
I remember early on in the clone wars hearing that Intel was strong arming motherboard manufacturers with delayed chipset availably if you also happened to make compatible kit for competitors. Now at the time I was funding my computer purchases with a paper route so it was always going to be AMD (cost/performance) but the scuttlebutt made buying AMD seem like the rebel/moral move.
[+] ksec|8 months ago|reply
You only need to look at total employees of AMD + TSMC, either AMD and TSMC are extremely efficiency or Intel is bloated.

Monopoly and Bureaucracy. That is basically what government is. It is kind of sad reading Intel was like that even in 2005.

[+] michaelcampbell|8 months ago|reply
> Like, nobody knows what LTQ or ASR stands for,

Arithmetic Shift Right? (I kid, of course, but seeing a team name that _might_ correspond to an assembly instruction, in an post about Intel amused me.)

[+] reactordev|8 months ago|reply
I can attest to this. 16 or so years ago I walked into one of their offices to talk Intel GPU’s and shaders with folks. They knew enough to build hardware but their software stack was 10% of what a GeForce 4 MX could do.

I didn’t end up taking the job.

I never really knew what happened to that division.

[+] declan_roberts|8 months ago|reply
> Many of those who lost their jobs worked in technical fields in an industry that pays an average wage of $180,000 a year. Those were great jobs and helped buoy the whole state, but most won’t find similar work locally.

This is the big risk we all took when we moved away from the Bay Area to work remotely. You arbitrage the COL difference and come out ahead big time, but it might be very hard to make the same salary locally if you can't find a remote job.

Best to make some hay while the sun is shining.

[+] MinimalAction|8 months ago|reply
I heard from a friend who works for Intel that he doesn't know why he was hired in the first place; his PhD was in a completely different domain, the objectives of the project were remote to his skills, and he told me this is what his entire team was made of. Seems like a lot of bloat present in this company, and it makes sense they feel the way forward is layoffs.
[+] sashank_1509|8 months ago|reply
Second hand knowledge, I have a cousin in Intel Oregon. Intel mass hires PhDs in Physics/ Chemistry or Biology etc, reasoning that a PhD is enough to learn whatever is needed for a process engineer. Assume 30-40 people hired every cohort and there is 12 or so cohorts a year. Another curious thing I noticed, was Intel had online multi correct tests for its engineers that they had to pass weekly, presumably to keep track whether they are actually learning on the job or not. The multi correct tests though just seem like rote memorization and easy to cheat.

Overall my 5000 ft view, was the culture was very different from FAANG or a Bay Area Tech company. If the Bay Area approach is high ownership and high accountability, Intel was much more process driven and low ownership. They even tracked hours worked for engineers in Oregon.

[+] jordanb|8 months ago|reply
I knew a guy who got a job with Intel's wearable division. Everything was chaotic, everyone was toxic, and Intel one day lost interest and fired the whole division.

The sad thing is they acquired the basis smartwatch and destroyed it, leaving only Garmin as developers of dedicated activity trackers. I considered getting a basis but was obviously glad I didn't.

[+] skadamou|8 months ago|reply
I know someone with a PhD in biochemistry who was hired at Intel from a cancer research lab... I'm sure he sold his chemistry background well but I always thought that was an odd hire. Maybe there are just so few qualified PhDs that they'll happily take folks from adjacent fields?
[+] evereverever|8 months ago|reply
Screw Intel. When they moved all of their contract work to InfoSys in India I lost hope in them. Dev shops and design agencies in Portland and Seattle were cut out of it.

They missed on buying Nvidia and in the last 5 years they have netted 30b but also spent 30b on stock buybacks. So they could still have 30b, but they chose to manipulate their stock instead.

All of those workers will move. There aren't any jobs in the Portland area. Downtown is vacant and still expensive and the startup scene has dwindled.

[+] burner420042|8 months ago|reply
It's hard for me to be specific about this but I've worked for 2 cloud FAANGs and whatever the management culture was like at Intel, whenever I work with ex-Intel management... their behavior and perspective just really rubbed me wrong. None went to work because they liked what they did. What was worse is you could feel it. They had a smell; not Tech, no imagination.
[+] mensetmanusman|8 months ago|reply
With the premier US semiconductor fab dying, China will take the reigns in 2027 according to intelligence agencies.
[+] UncleOxidant|8 months ago|reply
What I don't get is that there are at least a couple of very large, very valuable US companies that need to have their CPUs/GPUs fabbed (Apple and NVidia) and are currently dependent on fabs in Taiwan, a geopolitically risky place to be that dependent on. Both are sitting on huge reserves of ca$h. Why not either outright buy or buy a large stake in Intel to recapitalize it and allow it to finish the new SOTA fabs it was building? The CHIPS act was intended to help the likes of Intel and Micron, but the current admin has apparently blocked any further funding. If the current admin was serious about US semiconductor manufacturing it would try to arrange some kind of shotgun wedding where Apple & Nvidia (and others) take a stake in Intel to keep it afloat. Perhaps some kind of a consortium where the investing companies get priority in getting their parts fabbed? There's really no other US alternative for advanced semiconductor fabrication unless you're going to start from scratch and that doesn't seem like a viable idea.

Yes, I understand the argument that Intel management screwed up for too long and this is the market at work, but that ignores the geopolitical risks of what we're going to end up with. Forming some kind of consortium to keep Intel fabs running (and new ones built) could also include completely changing the management of the company.

[+] throwaway2037|8 months ago|reply

    > China will take the reigns in 2027
As I understand, the best fab tech is TSMC (Taiwan) and Samsung (Korea). Do you really expect China can surpass both in only two years? It seems unlikely, as they don't have access to high-end fab equipment from ASML.
[+] someonehere|8 months ago|reply
Part of me feels Intel was too high on the horse for years and the little ideas that were innovative were ignored. I knew Intel would be in this condition when Apple decided to move off of Intel. Apple’s switch was the canary in the coal mine. Intel wasn’t innovating and giving Apple what they wanted. So Apple, much like the little guys, found a way to innovate without them.
[+] fsckboy|8 months ago|reply
>Instead, Intel has embarked on an unprecedented and sustained campaign to shrink its business in response to a series of technical and financial crises.

it's not unprecedented, when companies' businesses contract, shrinking is exactly the right thing to do, not to mention that it's forced on them anyway.

[+] freefaler|8 months ago|reply
Andy Grove left in 1998, even though he was on the board of directors until 2004 (with diminished role). After he left the CEO role Intel just lost his way.
[+] JKCalhoun|8 months ago|reply
> Intel would sometimes cut jobs during fallow periods but it backfilled them almost immediately.

Smells like corporate bulimia.

When I worked/lived in the Bay Area there was a sense that corporations, and residents of the Bay Area, were moving to Oregon because it was cheaper … but still close enough to Silicon Valley. (Apropos of nothing really.)

[+] legitster|8 months ago|reply
> Smells like corporate bulimia.'

If companies have extra cash on hand, don't we want them to invest it and hire? The alternatives are stock buybacks or just sitting on the cash.

Obviously every bet is not going to pan out, but hiring even on the margin is probably good.

[+] pstuart|8 months ago|reply
If one is pushed out of the Bay Area but wants to stay on the Left Coast and have the next best approximation of the Bay Area, then the Portland metro is a natural default. At least in my case...
[+] yjftsjthsd-h|8 months ago|reply
> there was a sense that corporations, and residents of the Bay Area, were moving to Oregon because it was cheaper … but still close enough to Silicon Valley.

It's a different state and a 9-10 hour drive away; in what sense is it close?

[+] 0manrho|8 months ago|reply
This is yet another example of something that's happening all acrossed tech: (Over?)Correcting for a systemic problem; due to either/both misidentifying the problem, or reaching for the wrong solution that promises to solve the issue regardless.

The Asserted problem: Labor force/expense is too high, or at least, higher than is now thought necessary.

The (IMO) core problem: Measuring professional success/skill primarily by the size of the team a person manages.

The asserted solution: AI replacing Labor to reduce inflated labor costs/pools.

While there is some inherent benefit there to reducing team sizes back down into allegedly functionally sized units, there is a lack of accountability and understanding as to why that's beneficial, as it at seems to be done either due to the lofty promise of AI (which I'm critical of), or a more brutalist/myopic approach of merely trying to make the big labor-cost number smaller to increase margin/reduce expenses. To be clear, while I'm a critic of AI, I fully acknowledge it can absolutely be helpful in many instances. The problem is that people are learning the wrong lessons from this, as they've improperly identified the issue, and why the force reduction is allegedly/appears to be working.

Obviously, YMMV on a case-by-case/team/company basis, but Intel is known for being guilty of "Bigger = Better" when it comes to team size, and their new CEO acknowledged this somewhat with their "Bureaucracy kills innovation" speech [0].

That said, what may be good for the company (even if done for the right reasons) can still hurt the communities it built/depend on it.

0: https://www.inc.com/kit-eaton/in-just-3-words-intels-new-ceo...

[+] SilverBirch|7 months ago|reply
Many years ago now I remember chatting with my senior manager at Intel - he had been getting showered with resources because his team were "the future". At one point he was literally offered a deal of "You can have 10 more people, but they've got to be in Oregon". Essentially they had tonnes of people in Oregon and they didn't really have anything to do and so they were trying to sprinkle them around in to other teams instead of laying them off. Very weird organisation.
[+] jeffbee|8 months ago|reply
Hypothetically a glut of unemployed but highly skilled semiconductor people hanging around might kick off a wave of startup innovation.
[+] ngokevin|8 months ago|reply
As a PDX native that went to Oregon State and saw a lot of people go towards Intel, I don't feel the Oregon Intel crowd has strong aptitude for starting something up. They're at Intel in the first place because it was a secure job in their hometown they could coast at. I'm sure there are many of them that can do it, but I don't feel Portland has strong startup energy.
[+] RetiredRichard|8 months ago|reply
It doesn't, unless there is cheap capital floating around
[+] dyauspitr|8 months ago|reply
Only if there are paradigm shifts on the horizon. Chip making is high barrier to entry, capital intensive. No small collective is going to be able to start something up.
[+] insane_dreamer|8 months ago|reply
I wonder how many are on H1Bs? Intel has tons of engineers from India.
[+] hmmokidk|8 months ago|reply
That or they’ll have to move to Shenzhen to find work
[+] rossdavidh|8 months ago|reply
It sounds like a lot of the jobs are in manufacturing (fabs) or closely related. Once upon a time, innovative startups could be in that space (that's how "Silicon Valley" got the silicon part of its name). But, for several decades now, it requires billions of dollars to start up a semiconductor fab, and VC's don't seem to be all that into funding manufacturing.

I'm not saying it _should_ or _must_ be that way, just that it is.

[+] em3rgent0rdr|8 months ago|reply
Surely Intel made them sign non-competes and will vigorously enforce Intel's troves of patents and trade-secrets.
[+] orangechairs|8 months ago|reply
I am rooting for this to be the case, and frankly it should be, but typically the massive startup boom comes from companies IPOing (PayPal mafia, Google mafia, etc.). So much talent has been locked up at Intel, I'm hoping this is a liberation of sorts.
[+] vachina|8 months ago|reply
Lip Bu Tan is here for some spring cleaning.
[+] buyucu|8 months ago|reply
Intel will be taught in business schools as a textbook example of hubris and pride.
[+] georgeburdell|8 months ago|reply
It’s a local piece, but are the layoffs even disproportionate with other sites?
[+] orangechairs|8 months ago|reply
In Oregon, the layoffs were 3x-4x more than in AZ. What's kicked both regions in the teeth is that the layoffs were 4x-5x more than what Intel had stated. OregonLive has been reporting for weeks that 500+ Oregon Intel jobs were going to be cut -- they cut 2500 jobs. This is also round 3 (?) of Intel's layoffs in the last 12 months. It's massive and devastating.
[+] Pearledlang|8 months ago|reply
I heard a similar story from a friend deeply in Nokia in early 2000's.

Everyone non-technical was hired. Everyone with a strong ability was seen as difficult, and kicked out.

[+] bcatanzaro|8 months ago|reply
I've often wondered if Intel would still be a dominant force in computing if it had kept engineering in Silicon Valley. I worked at Intel both in Hillsboro and in Santa Clara and I feel that Intel's decision to put so much engineering in Oregon was done to insulate them from the pressures of Silicon Valley. They didn't have to pay very well, and they had a very insular culture - because they could afford it. They didn't have to work very hard to keep engineers at Intel because their engineers were basically trapped in beautiful Oregon and generally wouldn't consider moving back to expensive California.

Housing costs in the Bay Area are soul-crushing, but they do motivate people to work on the highest value projects because complacency just doesn't usually work if you're trying to buy a house. And so I wonder, if Intel had kept their workforce mostly in California, could they have stayed a dominant force in computing?

[+] hunglee2|8 months ago|reply
CHIPS act nuked Intel. The promise of unlimited US govt support to make a US TSMC encouraged Gelsinger to all in on domestic fab production, only to rugged first by Biden DEI stipulations, then by Trump 2.0 coercing Taipei to give up TSMC and start production in Arizona. All this while export controls cut Intel out from its second largest market (China), depriving it of much need revenue. Workers in Oregon losing jobs is downstream of all this
[+] lotsofpulp|8 months ago|reply
Workers in Oregon losing jobs is downstream of Intel not being able to produce the best chips, which earned the highest margins that Intel was used to earning. This has been in the works since the mid 2000s, and they still don’t have a competitive low power, high performance chip.

Also, Oregon is a terrible state to invest in as a business, especially one that is looking to pay high salaries.

[+] FMecha|7 months ago|reply
CHIPS Act also has people thinking it is some sort of Intel "bailout" act as well (compareable to 2008 GM bailout to them).