Intel 'to slash jobs'

 

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Posted on 4 Sep 2006 at 09:59

Intel is planning to cut about 10,000 jobs or ten per cent of its workforce according to sources close to the company. The proposed cuts follow a 90-day internal review ordered by Intel chief Paul Otellini as the company attempts to address plunging profitability at the chip giant. The cuts are predicted to be particularly heavy in the marketing department as the company will attempt to ring fence the key R&D businesses.

Otellini is expected to announce the results of the review at a meeting with employees on Tuesday. It is also expected that the company may shed some more of its less profitable businesses. The company has already sold its handheld comms chip unit to Marvell and last month it offloaded the media and signalling business that makes hardware and software to process voice and data over networks.

There are fears in Ireland, which has one of the biggest concentrations of Intel employees outside the US with 5,500 staff, that the axe will fall heavily on the subsidiary and deal a heavy blow to the Republic's high tech industry.

The company has been under heavy pressure from rival AMD who has been taking market share in key desktop and server markets. In April, the company revealed a 40 per cent drop in profits which led to the announcement of the internal review.

Whilst the company has fought back with the well received Dual Core replacements for the flagship Pentium processor, there is a feeling that Intel has grown fat and sluggish in the good times and now has to sharpen its act if it is to see off the challenge from AMD.

Shares of Intel rose 31 cents to $19.88 on the news, their highest point since 9 May.

Author: Steve Malone