SHARE

Big Layoffs Part of Intel’s Efficiency Push

Intel’s restructuring announcement today included specifics on its plans to reduce headcount and expenses. Earlier this year, Intel CEO Paul Otellini said he was on a mission to cut at least $1 billion in expenses from the chip giant’s budget, though no major staff cuts were expected at that time. Today, Intel said it expects […]

Written By

David Needle

Sep 6, 2006

Datamation content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More

Intel’s restructuring announcement today included specifics on its plans
to reduce headcount and expenses.

Earlier this year, Intel CEO Paul Otellini said he was on a
mission to cut at least $1 billion in expenses from the chip giant’s
budget, though no major staff cuts were expected at that time.

Today, Intel said it expects to save $2 billion in costs next year and $3
billion in 2008. A big part of the savings is a more aggressive move to cut
staff. Intel (Quote, Chart) said its employee population will drop from around 100,000 now, to about 95,000 by the end of this year, and to 92,000
by mid-2007.

The company didn’t give out a specific number of how many employees would
be laid off, but said the staffing drop would include layoffs, attrition and
“previously announced actions.” In July, Intel announced it would layoff
approximately 1,000 managers worldwide.

Most job reductions this year will occur in management, marketing and
information technology functions, Intel said. Intel has also sold
some businesses in the past few months, which will add to the cost
savings.

Analyst Gordon Haff said he didn’t think the streamlining would affect
Intel from a competitive standpoint and could even help its marketing
effort.

“It’s not to say Intel, or AMD for that matter, don’t need to do
marketing, but at the end of the day a lot of it comes down to how good your
chips are,” Haff, analyst with Illumintata, told internetnews.com.

“In its day, the ‘Inside Inside’ program was very effective and
disadvantaged AMD, but I think a lot of times Intel has gone too far in
programs it thinks can influence end-user behavior.”

Haff also said Intel may have come to the realization that too many
marketing programs can confuse customers and actually be a barrier to
greater sales.

Starting next year, Intel said it expects reductions will be
more broadly based as the company looks to improve labor efficiency in
manufacturing, improve equipment utilization, eliminate organizational
redundancies, and improve product design methods and processes.

In addition, Intel expects to achieve a capital expenditure avoidance of
$1 billion by better utilizing manufacturing equipment and space. The
company expects that approximately 25 percent of the savings in 2007 will
reduce cost of sales, and the rest will reduce operating expenses.

Severance costs will total approximately $200 million, Intel said.

This article was first published on InternetNews.com. To read the full article, click here.

Ethics and Artificial Intelligence: Driving Greater Equality

FEATURE | By James Maguire,
December 16, 2020
AI vs. Machine Learning vs. Deep Learning

FEATURE | By Cynthia Harvey,
December 11, 2020
Huawei’s AI Update: Things Are Moving Faster Than We Think

FEATURE | By Rob Enderle,
December 04, 2020
Keeping Machine Learning Algorithms Honest in the ‘Ethics-First’ Era

ARTIFICIAL INTELLIGENCE | By Guest Author,
November 18, 2020
Key Trends in Chatbots and RPA

FEATURE | By Guest Author,
November 10, 2020
Top 10 AIOps Companies

FEATURE | By Samuel Greengard,
November 05, 2020
What is Text Analysis?

ARTIFICIAL INTELLIGENCE | By Guest Author,
November 02, 2020
How Intel’s Work With Autonomous Cars Could Redefine General Purpose AI

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 29, 2020
Dell Technologies World: Weaving Together Human And Machine Interaction For AI And Robotics

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
October 23, 2020
The Super Moderator, or How IBM Project Debater Could Save Social Media

FEATURE | By Rob Enderle,
October 16, 2020
Top 10 Chatbot Platforms

FEATURE | By Cynthia Harvey,
October 07, 2020
Finding a Career Path in AI

ARTIFICIAL INTELLIGENCE | By Guest Author,
October 05, 2020
CIOs Discuss the Promise of AI and Data Science

FEATURE | By Guest Author,
September 25, 2020
Microsoft Is Building An AI Product That Could Predict The Future

FEATURE | By Rob Enderle,
September 25, 2020
Top 10 Machine Learning Companies 2021

FEATURE | By Cynthia Harvey,
September 22, 2020
NVIDIA and ARM: Massively Changing The AI Landscape

ARTIFICIAL INTELLIGENCE | By Rob Enderle,
September 18, 2020
Continuous Intelligence: Expert Discussion [Video and Podcast]

ARTIFICIAL INTELLIGENCE | By James Maguire,
September 14, 2020
Artificial Intelligence: Governance and Ethics [Video]

ARTIFICIAL INTELLIGENCE | By James Maguire,
September 13, 2020
IBM Watson At The US Open: Showcasing The Power Of A Mature Enterprise-Class AI

FEATURE | By Rob Enderle,
September 11, 2020
Artificial Intelligence: Perception vs. Reality

FEATURE | By James Maguire,
September 09, 2020

SEE ALL
ARTICLES

David Needle

David Needle is a veteran technology reporter based in Silicon Valley. He covers mobile, big data, customer experience, and social media, among other topics. He was formerly news editor at Infoworld, editor of Computer Currents and TabTimes, and West Coast bureau chief for both InformationWeek and Internet.com.

Big Layoffs Part of Intel’s Efficiency Push

David Needle

Recommended for you...

Company

Categories

Big Layoffs Part of Intel’s Efficiency Push

RELATED NEWS AND ANALYSIS

David Needle

Recommended for you...

Company

Categories