Intel is planning to spin off its networking unit as the struggling chipmaker looks to shed assets and cut costs under the direction of new CEO Lip-Bu Tan, according to a Friday report.

Intel on Thursday confirmed its plan to spin off its Network and Edge Group in a memo to customers and said it will seek outside investment for the business unit.

The networking division, which develops advanced communication and network cards for data centers and AI, employs thousands of employees, of which about 400 are in Israel, in the company's offices in Petah Tikva, Jerusalem and Haifa. One of Intel's vice presidents in Israel is the division's local development manager, Sharon Elmosnino-Almog.