Computer chip giant Intel is to cut its workforce by 10,500 in a bid to trim costs by some $3 billion annually.
The layoffs are the latest attempt by the Silicon Valley bellwether to stave off challenges by smaller rival Advanced Micro Devices, whose share of the market for chips that power personal computers grew to 22 percent at the end of the second quarter, up from 16 percent a year earlier.
The layoffs include some 1,000 management cuts announced in July and the selling of two telecommunications divisions that will pare a further 2,000 jobs, the company said on Tuesday.
Following the cuts, Intel will employ about 92,000 people by the middle of 2007, down from 102,500 at the end of the second quarter of this year, the company said.
Intel expects to pay out close to $200 million in severance pay.
"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," chief executive Paul Otellini said in a statement.