Intel is notifying 1,300 Oregon workers this week that it will lay them off by next month, eliminating 5.6% of its workforce in the state as the chipmaker moves to cut 15,000 jobs across its business.

This week’s layoffs will take effect between now and Nov. 15. It’s the biggest downsizing in the company’s five-decade history.

With its sales flagging, and its technology falling behind competitors’, Intel wants to shave $10 billion in expenses next year while it mounts a slow-moving turnaround effort. The company’s revenues have fallen by nearly a third since 2021 and Intel — until recently the world’s largest chipmaker — has been virtually shut out of the booming market for advanced artificial intelligence.

“As part of the broad-based cost savings plan we announced in August, we are making the hard but necessary decisions to reduce the size of our workforce,” Intel said in a written statement Tuesday. “These are the most difficult decisions we ever make, and we are treating people with care and respect. These changes support our strategy to become a leaner, simpler and more agile company as we position Intel for long-term sustainable growth.”

Intel started the year with 23,000 Oregon employees, more than any other business in the state. Some workers took buyouts and early retirement offers earlier but Intel hasn’t said how many.

Intel notified Oregon officials of the pending cuts in a letter Tuesday to comply with federal law on reporting mass layoffs. Large job cuts are coming in other locales, too, but the company didn’t immediately specify how many or where.

Workers who took buyout offers received 13 weeks of pay, plus an additional 1.5 weeks for each year they worked at the company, plus a year of health-care benefits. Severance for laid-off workers is similar.

The job cuts come despite $8.5 billion in federal subsidies the company won earlier this year, plus billions more in loans and tax credits. That money comes from the 2022 CHIPS Act, which aims to revive domestic semiconductor production and reduce American dependence on technology manufactured in Asia.

Oregon kicked in an additional $115 million in subsidies to help fund a “ multibillion-dollar ” expansion of its Gordon Moore Park manufacturing campus in Hillsboro. Intel is also building new factories in Arizona and Ohio. The company has affirmed its commitment to the projects in all three states but it’s not clear how Intel’s spending cuts will affect the timing of the work.

Intel hired CEO Pat Gelsinger in 2021 and embraced his plan to spend heavily on manufacturing and engineering in an effort to revive the company’s technology. While Intel’s chips have advanced rapidly under Gelsinger, rivals like AMD, Nvidia and Taiwan Semiconductor Manufacturing Co. have been moving quickly, too.

Intel, meanwhile, has been saddled with the costs of playing catch-up while its fortunes remain tied to the stagnant PC market and to conventional data center technology. Competitors have made far more headway in the lucrative artificial intelligence sector.

Oregon is the company’s largest site anywhere in the world and its most advanced. Intel develops each new generation of its computer chips at its Hillsboro manufacturing campus, then replicating that manufacturing site at factories in Arizona, Ireland and Israel.

The 1,300 layoffs announced Tuesday are among the biggest single round of job cuts in Oregon history.

Even so, they won’t have a major impact by themselves on a state economy with roughly 2 million workers. Oregon unemployment rate is historically low at 4.0%.

But Intel is facing severe headwinds, and chronic troubles could have profound implications for Oregon’s semiconductor industry, one of the state’s major economic engines.

Intel has suggested it might eventually split its chip design and manufacturing businesses into separate companies. It’s impossible know how breaking Intel into two might affect each company’s role in Oregon, though both sides of Intel’s business have major operations in the state.

Meanwhile, The Wall Street Journal and other publications have floated the possibility that other chip companies — including Qualcomm and ARM Holdings — might try to buy Intel, or a large part of its business.

A deal on that scale is extremely unlikely because the transaction would be very expensive, extraordinarily complex and unlikely to pass antitrust review in the U.S., Europe and China. But Intel is already moving to spin off its programmable chip business, and other, smaller business units might be on the block, too.

For example, employees said Intel has delayed layoffs this its networking business while it seeks “creative” ways to fund that operation. That led to internal speculation that Intel may be close to selling that piece of the company.

Meanwhile, Oregon is a leading candidate for one of three semiconductor research sites to be awarded as soon as this fall by the U.S. Department of Commerce. A research hub could bring $900 million in federal investment to the state and help secure Oregon’s position as a national leader in chip technology.

Many states — notably New York, California and Arizona — are also pursuing the federal research hubs. It’s not clear how Intel’s stumbles might affect the Commerce Department’s decision-making as it chooses where to site the facilities.