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Instead of an advanced Intel development center in Haifa, Israel, a parking lot will be built.

Published: 2023-01-17

In 2021, after a difficult period for Intel on both the technology and management fronts, the company revealed a $200 million plan to build a new research center in Haifa with advanced labs, sports fields, green spaces and a visitor center. On the roof of the building it was planned to place a wellness center "with a stunning view of the sea." No one could have imagined that in a year and five months, Intel would recognize that the construction of the center was canceled and a parking lot would be created instead.

Now all plans have changed. Intel has confirmed that it will cancel the construction of a new office building next to the Matam technology park in Haifa, and instead build parking for employees. As far as is known, the Haifa Municipality has not received requests to change the land zoning. The new building was designed from the outset with an Intel image in mind, with expansive seating areas that also needed to cater to a wide range of people. But with the implementation of the optimization plan, this construction was cancelled.

This is not the first such case for Intel. Last month, the company postponed the construction of a new plant in Magdeburg, Germany. One reason was that while the company waited for more government subsidies, construction costs rose unsustainably. Intel construction projects in Oregon and India were also changed.

In contrast to the plant in Germany, the construction of which is only being delayed, the construction of the development center in Israel (IDC12) has been canceled for various reasons. Apparently, Intel decided to start its global optimization program by canceling small projects, reducing the scope of agreements with contractors and consultants, and reducing real estate, rather than laying off employees.

In a comment from Intel itself, it says: “Intel is committed to making the most of its real estate with the goal of creating a dynamic and comfortable working environment for its employees while reducing costs. Therefore, we decided to stop the construction of IDC12"

Intel probably won't be able to avoid mass layoffs, but those plans are on hold for now until the end of this year or next year. The company is expected to cut $10 billion in spending by 2025. Intel is not currently hiring like it has been in the past and is running hybrid workflows at its existing development center in Haifa, which currently employs 5,000 people.

Intel Israel is still the largest employer in the country with 12,000 employees plus another 2,000 at Mobileye subsidiary, but due to the crisis in the global technology industry and competition from other semiconductor giants such as TSMC, NVIDIA, Apple and Amazon, the number of employees has not increased in recent years.

While Intel is canceling the construction of its new development center, another American giant, Apple, is indeed planning to open its new building in the same industrial area in Haifa very soon. The 46,000 square meter building will be operational in the next few months.