Sources: Intel Layoffs May Be Imminent

By Scott M. Fulton, III | Published September 5, 2006, 12:20 PM

In the next step of its sweeping reorganization plan, Intel may be preparing to let go of as many as 22,000 workers worldwide, according to media sources close to the affected operations. The announcement may come from the company as soon as today, according to the Financial Times, which cites analysts as saying the final job cut number may come in at around 10,000, once those affected have been notified after returning from their Labor Day holiday.

Intel's operations in Israel could be severely affected by these cuts, if the fears of the Tel Aviv-based newspaper Ma'ariv are realized. Last December, Intel announced it would be expanding its 300 nm fabrication facility in Kiryat Gat to handle production of 45 nm components, supplementing that plant's current 90 nm line.

But the company is already further along in building a second 45 nm facility in Chandler, Arizona, where 65 nm parts are already being produced. Ma'ariv reports as many as 20,000 jobs could be severed if expansion plans for Kiryat Gat are put on hold; the Israeli business daily Globes estimates a number closer to 6,500.

In nearby Haifa, Intel houses the research facility responsible for developing the power-saving technology featured in the company's Woodcrest, Merom, and Conroe processors, introduced just last June and July.

Last December, the company confirmed it would receive over half a billion dollars in subsidies from the government of Israel for expanding its Kiryat Gat operations. If it turns out that Intel must scale down its plans there, the fate of those subsidies could be jeopardized. Some might argue it would be cheaper to keep those folks employed.

Meanwhile, the Kuala Lumpur-based Star reportedly intercepted an Intel company memorandum referring to the implementation of another voluntary separation scheme, with the goal being to eliminate up to 2,000 more jobs in the company's Malaysian operations.

Late last week, the Irish Saturday Business Post reported Intel would be implementing a similar scheme in that country as well. Only two and a half months ago, Intel completed the refurbishing of its Leixlip fabrication center there, to handle 65 nm production.

"Voluntary separations" have been a principal part of nearly every major Intel corporate restructuring - there have been several - since 1985.

In April, Intel CEO Paul Otellini announced his company would be implementing a series of massive restructuring changes, the details of which were supposed to have been revealed in totum in later months. Instead, portions of the plan have been implemented almost ad hoc, including a sale of the company's communications chip business to Santa Clara-based neighbor Marvell last June, followed by a sale of its media and signaling division to Eicon Networks in August.

BetaNews has contacted Intel this morning, which indicated that an announcement could be forthcoming.

Comments

View comments by with a score of at least

What profits, you don't remember the days when a CPU use to cost $200 - $300 a piece and it wasn't even top of the line. Now a days computers last longer and development time has increased yet profits have decreased. Same thing with AMD and other chip makers. I would say though that the executive team is making $$$$ yet the poor joe smoes working in the plant producing the chips are getting layed off for their mistakes.

Score: 0

|

I say if you have to lay of 20,000 people you as CEO have failed and you should be the first to go.

Score: 0

|

Agreed!

Score: 0

|

O yes - and they lose soooooo much because of the wicked pirates, too. Poor global players. We gotta have pity with them. Just wondering where all the profit is trickling off to . . .

Score: 0

|

All semiconductor companies are in a rut right now. I work for a competing company, ST Microelectronics, and they are also cutting back on hiring and vacation time for all of its employees. Not an unlikely thing to happen to this industry.

Score: 0

|

We are a client of Intel's and they have massively scaled back the work for us as well. The organization has dramatically changed in the past two months. Our main contact at Intel was let go so we had to scramble to maintain our relationship with them as well.

Score: 0

|

So Intel will get more profitable by laying off, which will drive AMD to layoff to cut costs and it will continue until the economy turns back up.

Score: 0

|

it will continue until the economy turns back up.
Ironically, I believe actions like this are the cause of economic problems. "Oh, no one can afford our product? Let us just reduce the flow of money from the fat cats to the consumers."

One day, all the corporate greed mongers will not be able to turn a profit because once you own everything, there is nowhere to go but down. An epidemic of malnourishment will sweep the globe, and corporate big wigs will still wonder why sales are declining.

Score: 0

|

Yes! Well said!

Score: 0

|

So, time to lay off ppl again. Just because they have lost to AMD. :P

Score: 0

|

Report: Microsoft to randomize Europe's browser screen choices

The fact that "A" is for "Apple" was apparently at the heart of browser vendor objections to Microsoft's alternative to listing IE first.

Acer eclipses Dell for #2 spot in global PC shipments, says iSuppli data

It literally does look like a 360-degree turnaround in Dell's fortunes, as the bells of bad tidings now toll solely for Dell.

Microsoft, don't hang up on Windows Mobile, but do call for help

Only a Manhattan Project can save Microsoft's phone strategy now.

See ya later, WinMo: Microsoft's mobile strategy needs a reboot

Carmi Levy | Wide Angle Zoom: Hands up if you're considering upgrading to a Windows phone for the holidays...Anybody?

Playing catch-up in 2010: Windows Mobile, BlackBerry, and Symbian

Microsoft, RIM, and Nokia are each working on improved mobile operating systems. But could these efforts add up to too little, too late?

Will Nokia's plans further alienate American consumers?

A look at Nokia's plans for the coming years does little to shine up the company's increasingly dull image.

Bing bonked by service outage Thursday, Microsoft configured the wrong server

It's always nice to have a backup, but it's even nicer to remember which one is the backup. That's the lesson Bing's admins learned yesterday evening.

Survey reveals there are more women then men, including on social networks

If you think you can market your products and services online as though you're selling car batteries in the middle of halftime, think again. And again.

Android team updates 'Donut' and 'Eclair' SDKs

The Android SDK includes components which optimize app development for each version of the mobile operating system. Today, the 1.6 and 2.0 components got updates.

The Black Screen Syndrome, or, Tech news in search of the apocalypse

Scott Fulton On Point: This is a story about something that should not have been a story, about something that at one time was a story.

Online advertising evolves away from display, toward interactive software

Marketing departments and agencies are increasingly establishing positions for "creative technologists" who can steer designers and developers toward platforms that enable direct connections with consumers.