Intel is reportedly scaling back its R&D teams in Israel, following a series of layoffs that will impact several hundred employees. This move is part of a broader cost-cutting initiative aimed at addressing the company's financial challenges. The layoffs are expected to focus on the R&D department, while manufacturing staff will remain largely intact as Intel prepares for the completion of Fab 38 in Kiryat Gat.

Intel's Israeli operations employ around 11,700 people, with a significant portion working in R&D. The company has three R&D sites in Israel, each with a specialized focus, including CPU development in Haifa. The layoffs are likely to impact these R&D centers, potentially affecting Intel's future microarchitecture breakthroughs.

Despite the layoffs, Intel is facing a talent drain as employees are leaving for better opportunities, particularly at Nvidia. The tech giant has been actively hiring former Intel employees, offering more attractive compensation packages and share options. This trend is expected to continue as the layoffs progress, potentially leading to a significant number of employees moving to Nvidia and other tech companies.