Intel Corp cuts 1,000 managers
Intel Corp will lay off 1,000 managers, or about 1% of its work force, as it seeks to streamline its business.india Updated: Jul 14, 2006 10:16 IST
Intel Corp said on Thursday it will lay off 1,000 managers, or about 1 per cent of its work force, as it seeks to streamline its business amid heated competition with rival Advanced Micro Devices Inc.
"This morning we informed our employees that Intel is reducing the number of managers by about 1,000 worldwide," said Intel spokesman Chuck Mulloy. "This action is designed to both reduce costs and improve communications and decision-making across the company."
The world's biggest chipmaker said in April that it would conduct a top-to-bottom review of its operations, and analysts said Thursday's cuts probably only represented the tip of the iceberg.
"We thought they were going to cut 10,000 or more jobs in total, so this is one step of the way," said Eric Ross, an analyst with ThinkEquity Partners. "If this is managers, I'm sure there are more to come."
Last month, Intel said it would sell its money-losing communications chip business to Marvell Technology Group Ltd. for $600 million as it refocused on personal computer processors and related chips.
Other lackluster units that could be jettisoned include one that makes a kind of flash memory chip commonly found in mobile telephones, and the Itanium chip for server computers that was supposed to break new ground in computing but has failed to gain traction in the market, Ross said.
Mulloy said Intel was not disclosing how much it would save with the layoffs but added that the company would give more details during its quarterly earnings report next week.
While the cuts fell short of many analysts' expectations, they showed that no one was immune to the restructuring efforts, said Hans Mosesmann, a researcher with Moors & Cabot.
"The significance is that when you cut managers it really shows you are serious about cutting projects that are not living up to expectations," Mosesmann said.
Intel shares were off 2 cents at $17.86 in afternoon trading on the Nasdaq.
The company's stock has fallen 33 per cent over the past year as it loses market share to Advanced Micro, shares of which have risen nearly 17 per cent over the same time as it grabs market share in server and desktop computers.