Intel tax breaks safe despite layoffs

The chipmaking giant will have to continue to invest in Oregon to maintain billion-dollar tax exemptions.

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After a year of slowing sales, Intel announced it would start layoffs Monday, raising questions about the company’s massive tax exemptions from Washington County.

As Oregonian tech reporter Mike Rogoway reports, the exemptions continue unabated.

Intel’s deal comes with no headcount requirement. Even so, the company’s Oregon workforce is at an all-time high, 18,600, pending this month’s layoffs (Intel hasn’t said how many people will lose their jobs in the current layoffs). The tax breaks come through the state’s Strategic Investment Program (SIP), which exempts capital investments from the property taxes other businesses pay.

It’s the fifth time local officials have given Intel similar tax breaks, and none of those deals have come with minimum job requirements. (One prior deal did put a ceiling on Intel’s hiring, part of an effort to constrain growth in Washington County. But the county waived that job ceiling in 2003 without ever enforcing it.) Intel has reduced the size of its Oregon work force multiple times since winning its first SIP deal, most significantly during a broad reorganization that began in 2006. To this point, though, the chipmaker’s long-term employment trajectory has continued upward.


Intel will have to continue to make actual investments in its facilities, or the property tax break will not apply.

CEO Brian Krzanich wrote in an internal memo that was distributed Tuesday that no more than 100 people would be cut from each of the company’s facilities.

“One thing I have always promised is to be open and transparent, and to treat employees and partners with respect and integrity,” he wrote in Tuesday’s memo.

He said some reductions will come from areas of the company that have become less important and some will be aimed at eliminating redundant activities and inefficiencies. Other layoffs will target employees with lower job performance.

(SOURCE: Associated Press)

Workers subjected to the layoffs will be paid through July 15.


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