Intel may announce 10,000 job cuts

Firm currently employs 6,500 people at its various facilities around the country.

September 4, 2006 05:43
1 minute read.

Intel CEO Paul Otellini may cut at least 10,000 jobs next week, or about 10 percent of the chipmaker's workforce, in his efforts to slash $1 billion in costs this year. Otellini will discuss the results of a 90-day internal review with employees on September 5, said Patrick Ward, a spokesman for Intel. In an interview on Sunday, Ward called reports on job cuts "speculation." Intel Israel spokesman Koby Bahar echoed those sentiments Sunday and would not comment on the effects of the internal review on the company's local operation. Intel currently employs 6,500 people at its various facilities around the country and is in the process of building a new Fab 28 in Kiryat Gat, which Intel said would add some 4,000 workers. Intel, the world's biggest semiconductor maker, is wrapping up its most sweeping overhaul since the 1980s as Otellini battles market-share losses and falling sales. He decided to fire 1,000 managers in July to restore profit growth, marking the biggest cuts at the Santa Clara, California-based company in four years. "It would be seen as lame if Intel does less than 10,000," said David Wu, an analyst at Global Crown Capital in San Francisco. He rates the stock "overweight" and owns shares. Wu is advising investors to buy Intel's stock because he expects recently introduced products will help recapture market share. Otellini, 55, is eliminating jobs and selling businesses after forecasting the first annual sales drop in five years. While Intel tried to create new markets for its personal-computer microprocessors, the company's closest competitor gained ground. Sunnyvale, California-based Advanced Micro Devices Inc. now has more than 20% of the market for chips that power PCs. Intel ended the second quarter with 102,500 employees. That doesn't include the 1,000 management reductions in July, and the announced sale of two communications units that will shave 2,000 more people from the payroll by the end of the year. In the second quarter, Intel reported its biggest profit drop in more than four years and said it was unlikely to meet its 2006 sales forecast. (Bloomberg) Avi Krawitz contributed to this report.

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