What layoffs at 2 major Oregon employers could mean for the state’s economic future

Major layoffs at two of Oregon’s biggest employers are raising concerns for the state’s economy.

Last week, chipmaker Intel — which employs more than 20,000 people in Oregon — told investors it would cut more than 15,000 positions from its global workforce, or roughly 15% of its workers. It’s unknown how many of those cuts will be in Oregon, where the Hillsboro campus acts as the company’s research and development hub.

Intel’s announcement comes on the heels of footwear giant Nike telling Oregon officials in April it would slash more than 700 workers from its headquarters near Beaverton.

“Anytime we see a major employer, or an anchor employer, to Oregon’s economy cutting jobs,” state employment economist Gail Krumenauer said, “even if we don’t know what the direct impact is specifically within our community — that’s something that is not taken as positive news or a positive sign for the local economy.”

Related: Intel to lay off more than 15% of its workforce as it cuts costs to turn business around

Oregon’s economic picture has shifted dramatically in the last few decades, moving from heavy reliance on timber and natural resources, to being a hub for technology and semiconductors, health care, and footwear and apparel. Those industries are expected to grow job opportunities in the state in the years to come, but announcements from Nike and Intel signal growth is currently stagnant. Economists predict this is a short-term stumble.

“We do have much reason for optimism in the longer term,” Krumenauer said, “particularly, as many people have been discussing, the upcoming CHIPS Act funding effects that we expect to see in Oregon and specifically in semiconductor and electronic product manufacturing.”

The massive job cuts at Nike and Intel could be due to changes specific to those companies, not because of a downturn in semiconductors or footwear.

Jon Metzler is a continuing lecturer at University of California, Berkeley’s business school. When discussing anchor businesses with classes, he often uses Intel in Oregon as an example.

Overall, Metzler says Oregon is a successful case study as a state economy that moved away from timber to more modern industries. Intel’s presence in Oregon is one of the things that helped that transition, encouraging other semiconductor firms to develop in the state.

“Intel is not going away,” Metzler said. “But Intel may be slimming down.”

Related: Nike will lay off 740 employees in Beaverton

Analysts paint a similar picture with Nike, saying the footwear brand needs an innovative boost as smaller brands look to break into the market. Metzler said for Intel, the company is working to regain its position as a technology leader after missing the boat on advancement in artificial intelligence.

“Intel is trying to execute a very delicate balancing act,” he said. “And the layoffs that were announced with earnings are part of that balancing.”

For Intel and Oregon’s semiconductor industry, both Krumenauer and Metzler expect CHIPS Act funding to help improve the long-term outlook.

Companies have already received billions in federal CHIPS Act funding, and state lawmakers have promised $200 million to support the industry. Economists watching Oregon’s semiconductor firms say that money will help keep planned expansion projects afloat and will likely spur more development in the industry.

Related: Acting US Labor Secretary touts job creation in Oregon’s semiconductor industry during Hillsboro visit

But for now, Krumenauer said overall Oregon’s job growth has slowed to a snail’s pace. The state added just 11,000 jobs in the last year.

“That’s a growth of 0.6%, which is pretty slow by historical standards,” she said. “And if we’re looking at the broad sectors of the economy, Oregon’s private health care and social assistance sector alone has added more than 16,000 jobs. So that’s about 6% growth and is really carrying the economy. There’s more growth in that one sector of Oregon’s economy than there is overall.”

In the future, Krumenauer said the growth rate for jobs in science, technology, engineering and math — all of which support the semiconductor industry — will pick up. State data shows jobs in those fields could outpace the growth rate of all occupations by the end of the decade.