Intel Cuts 10,500 Jobs

September 7th, 2006: In the face of increased competition from Advanced Micro Devices (AMD), Intel has announced that it will be letting 10,500 workers go over the next year in the hope of improving its bottom line

The chip giant says that it will be cutting its 102,500 workforce back to 92,000 by selling off business units, through attrition and layoffs. It expects this restructuring to save it US$2b by the end of 2007 and around $3b annually after that. It also expects to reduce capital expenditures in 2008 by $1b.

“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,” says Paul Otellini, Intel chief executive.

Management, marketing and information technology employees will be the first hit, the company said in a statement. It will eliminate 7,500 positions by the end of this year including 2,000 employees from two business units, 2,000 through attrition, 1,000 managers it has already let go in July and 2,500 additional from other areas.

Intel will eliminate another 3,000 jobs next year in a more broad-based layoff to make up the rest of the 10,500. This move marks the largest restructuring Intel has undergone since the 1980’s when it cut 7,000 jobs and closed down its memory chip business to focus on microprocessors.

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