[fabacad] Intel to cut 10,000 to 15,000 jobs

From: Saif Abrar <saif.abrar@xxxxxxxxxxx>
To: Saif Abrar <saif.abrar@xxxxxxxxxxx>
Date: Fri, 14 Jul 2006 08:49:10 +0530
EE Times: Latest News
Intel to cut 10,000 to 15,000 jobs, says analyst


Mark LaPedus
(07/13/2006 11:10 AM EDT)
URL: http://www.eetimes.com/showArticle.jhtml?articleID=190303120

SAN FRANCISCO â Troubled Intel Corp. plans to fire 1,000 managers as part
of an effort to cut $1 billion in costs, a company spokesperson said
Thursday (July 13).

Spokesperson Chuck Mulloy confirmed that the company had informed employees
Thursday morning that 1,000 managers would be let go as the first action of
the company's previously disclosed restructuring initiative. The affected
managers are from across all Intel business divisions in all geographies,
Mulloy said.

Mulloy said the company is not disclosing the anticipated cost savings of
the manager layoff at this time. Intel will provide an update on its
restructuring initiative later in the third quarter, Mulloy said. "This
afternoon, microprocessor leader Intel distributed an internal memorandum
to its employee base stating that it would be reducing the number of
managers by roughly 1,000 over the next few days as part of its 90-day
strategic review announced in April," said Tim Luke, an analyst from Lehman
Brothers, in a report.

But the question is what's next for the chip giant? Intel is also expected
to disclose more details of its restructuring plans, including a move to
cut 10,000 to 15,000 jobs, according to another analyst.

"We have learned that Intel may be calling a press conference later today
to announce the results of the company's 'top to bottom' review," said Doug
Freedman, an analyst with American Technology Research Inc., in a report.
"We believe investors are looking for workforce reductions in the range of
10,000 to 15,000, as the company streamlines research and development with
a PC-centric focus."

Mulloy called Freedman's report pure speculation. "There is no news
conference," he said.

Intel's workforce is in the range of 100,000 employees. The recent sale of
Intel's XScale business to Marvell Technology will reduce Intel's head
count by 1,400, he said.

Hit hard by the PC slowdown and stiff competition, Intel in April said that
it plans to restructure the company. Paul Otellini, chief executive of
Intel (Santa Clara, Calif.), told analysts he plans an overhaul that will
impact "every part" of the company.

Analysts applauded the reported job cuts at Intel, which have been expected
for weeks amid problems at the chip giant. "We do favor the work force
reductions as the major PC segments begin to reuse technology," Freedman
said.

Meanwhile, Lehman Brothers' Luke said the workforce reductions will happen
over time at the chip giant.

"Furthermore, after discussions with management, we believe that the
strategic review process should continue through into August where we
expect the possibility for incremental divestitures, strategic
acquisitions, and layoffs bringing the total count to at least [10,000]
employees which represents roughly 10 percent of entire employee base of
103,000," Luke said.

"However, given continued softness in PC end-market demand ahead of
expected July price cuts along with limited visibility on 2H '06 demand and
concerns that Intel still retains significant excess channel inventories
and overcapacity and margins, we remain on the sideline on the shares ahead
of Q2 results on July 19," he said.

Regards,
Syed SAIF Abrar
Philips Towers, # 1, Murphy Road, Ulsoor, Bangalore-8, INDIA
[fabacad] Intel to cut 10,000 to 15,000 jobs

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