{"id":550090,"date":"2006-09-06T16:11:40","date_gmt":"2006-09-06T16:11:40","guid":{"rendered":"http:\/\/localhost:8888\/wordpress\/technology\/550090-intel-slashes-10-500-from-workforce-worldwide.html"},"modified":"2006-09-06T16:11:40","modified_gmt":"2006-09-06T16:11:40","slug":"intel-slashes-10-500-from-workforce-worldwide","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/technology\/550090-intel-slashes-10-500-from-workforce-worldwide.html","title":{"rendered":"Intel slashes 10,500 from workforce worldwide"},"content":{"rendered":"

The world’s leading computer chip maker had a payroll of 99,000 people worldwide prior to the much-anticipated announcement that it would lay off approximately 10,500 workers. <\/font><\/p>\n

"These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come," said Paul Otellini, Intel’s president and chief executive officer. <\/font><\/p>\n

Intel’s stock price slipped slightly to 19.73 dollars in after-hours trading, apparently due to disappointment that the job cuts were deeper and faster. <\/font><\/p>\n

"I think people will go home, think about it and tomorrow morning think otherwise," Global Crown Capital analyst David Wu said, expressing confidence that Intel stock would rebound. <\/font><\/p>\n

Intel’s projected cost-reductions by the end of next year exceeded Wu’s expectations by a half-billion dollars. <\/font><\/p>\n

"The objective is to lose costs," Wu said. "How they do it is irrelevant." <\/font><\/p>\n

Intel said its workforce would decline to 95,000 by the end of this year as a result of staff reductions, attrition and previously announced layoffs. <\/font><\/p>\n

By mid-2007, the Intel workforce would drop to about 92,000 employees, 10,500 fewer than the company’s staffing level at the end of the second quarter of 2006. <\/font><\/p>\n

The chip maker also planned to cut costs in merchandising, capital and materials, according to Intel spokesman Mark Pettinger, to generate savings of approximately two billion dollars in 2007. <\/font><\/p>\n

In 2008 the company expects savings from this restructuring to grow to approximately three billion dollars annually. <\/font><\/p>\n

In July Intel shuffled management on the heels of a lackluster earnings report and the laying off of 1,000 managers at its facilities worldwide. <\/font><\/p>\n

"It is streamlining the bureaucracy," Pettinger said. "It wasn’t just about cutting headcount; it was about making Intel a leaner, more efficient company in terms of everything." <\/font><\/p>\n

Principal analyst Nathan Brookwood of Insight 64 in California called the Intel cuts "a good start" but was concerned that remaining workers would be spread too thin. <\/font><\/p>\n

"The folks at Intel were already giving more than 100% at their jobs," Brookwood said. "Intel needs to cut back on the breadth of products it is working on." <\/font><\/p>\n

For example, Intel re-designs microchip architecture in two-year cycles while the industry average is four, Brookwood noted. Switching to four-year cycles would mean Intel would need fewer engineers. <\/font><\/p>\n

"I see Mr. Otellini saying ‘Stay the course’ and I’m not sure staying the course is the right solution for Intel," Brookwood said. <\/font><\/p>\n

While the deepest cuts were finished, Intel would remain on watch for ways to reduce costs, Pettinger said. <\/font><\/p>\n

Intel’s drive to trim costs and improve efficiency came as it waged a price war with Silicon Valley rival Advanced Micro Devices (AMD). <\/font><\/p>\n

AMD had begun eating away at Intel’s market share before Intel unveiled its family of speedy dual-core Xeon processors in July. <\/font><\/p>\n

AMD responded in August by unveiling fast, energy-efficient multi-core Next-Generation Opteron computer chips it heralded as precursors to a quad-core chip to be released in the middle of 2007. <\/font><\/p>\n

Intel has announced it will begin selling quad-core processors by the end of this year. <\/font><\/p>\n

"You have to give credit to AMD," NPD Group research director Neil Strother said while discussing the Intel job cuts. "Competition is a good thing but it can be a very difficult thing." <\/font><\/p>\n

"When you are Intel and you take a cut of that size, it is painful and you have to lay off some excellent people." <\/font><\/p>\n

Santa Clara, California-based Intel reported a 57% dive in its second quarter earnings this year on weaker demand. It scored a 13% drop in revenue from the same quarter last year. <\/font><\/p>\n

Intel revenue worldwide in 2005 was 38.8 billion dollars. <\/font><\/p>\n

Inet-Bridge<\/font><\/p>\n

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Intel announced on Tuesday it would cut more than a tenth of its workforce as part of a drive to become more efficient in the face of tough competition in the computer chip market. <\/p>\n","protected":false},"author":23,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[17],"tags":[],"class_list":["post-550090","post","type-post","status-publish","format-standard","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550090"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=550090"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/550090\/revisions"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=550090"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=550090"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=550090"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}