Intel confirmed this week that it has canceled construction of a new office building next to the Matam technology park in Haifa. Instead, it will put up a parking lot.
Intel told The Register the move was about “achieving cost reductions… We have determined we can meet our Haifa employees’ needs with our existing offices and as a result, we have decided to stop the build-out of IDC12,” an Intel spokesperson said. There was no mention about the parking lot.
The move comes about a year and a half ago after newly appointed Intel CEO Pat Gelsinger arrived in Israel and unveiled a $200 million plan to build a new luxury research and development center at the site.
The planned center was to feature thousands of square meters of space for sports and green areas, cafes with workspaces, pop-up restaurants, sophisticated laboratories, an auditorium and a visitors’ center open to the general public. The full-service health and fitness center on the roof of the office building was expected to offer “an amazing sea view.”
But all that has changed with the 2022 economic crash in the technology sector.
Intel Israel laid off dozens of its 14,000 employees in the fourth quarter of 2022. Several projects based out of Israel were discontinued, with layoffs including employees across several departments. Intel is still the country’s largest private tech employer, but it clearly is faltering.
The company’s corporate headquarters told reporters in October during a Q3 earnings call that the company would lay off a “meaningful number” of employees and cut spending by approximately $10 billion annually by 2025.
“As a response to the market conditions and the macroeconomic changes, global Intel is acting to reduce expenses amounting to billions of dollars over the next three years, including by making the size of teams more efficient and limiting the recruitment of employees, which will result in a certain reduction of the workforce across the world, including in Israel,” its statement read.
In December 2022, Intel ordered each of its global centers to reduce their expenses, with layoffs being the last resort. In some departments, use of external advisers was curtailed. Other departments offered retirement packages or unpaid leave to selected employees.
The company has seen its revenues plummet 20 percent year over year to $15.3 billion.
Now, the site intended to be a luxury R&D center is instead set to become a parking lot for the workers in the park, according to Globes, which adds that Apple is about to inaugurate a new center in the same industrial zone.
At least for now.