Intel announced that 269 workers at its sprawling campus in Folsom will be laid off in a global restructuring plan.
About 6,300 people are currently employed there, and the layoffs represent about 4 percent of the workforce.
But more than 150 people were laid off last year, and there is a downsizing trend that is a concern for some local businesses.
At its height in 2001, about 8,000 people worked for Intel in Folsom.
The owner of one nearby hair salon said a longtime customer came in to say goodbye after he was laid off after 18 years with Intel.
Other former employees say some workers have left for other jobs hoping to avoid pink slips.
Intel's primary businesses is designing and producing chip sets for desktop computers, which are falling out of favor with those who are using smart phones and tablets instead. Intel is slowly moving into that market but is reorganizing in the near term.
"I think people in the tech industry are competitive and evolving, and we've seen this happen before and they come out a stronger partner," said Joe Gagliardi, CEO and president of the Folsom Chamber of Commerce.
Some businesses within walking distance of Intel are waiting to see what impact the layoffs have, while others note that there are still over 6,000 Intel workers even with the layoffs. They say a booming Folsom economy will help them weather the layoffs until Intel's new strategic plans are in place.