Santa Clara, Calif.-based Intel Corp. has announced restructuring plans that include a 10-percent reduction in the influential chip-maker’s work force.
The company said it plans to pare its employee population by 10,500 in the next year, to 92,000 workers, via layoffs, attrition and “previously announced actions.” It also intends to find additional savings in merchandising, capital and materials.
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The company said in a news release that it “expects to generate savings in costs and operating expenses of approximately $2 billion in 2007. In 2008 the company expects savings from this restructuring to grow to approximately $3 billion annually.”
“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,” Paul Otellini, Intel’s president and CEO, said in a Sept. 5 news release.
About 7,500 of the 10,500 job reductions are expected to come by the end of this year, most of them in management, marketing and information technology, from attrition, or from the previously announced sale of businesses, the news release said.
Next year’s reductions will be “more broadly based,” it said, “as Intel improves labor efficiency in manufacturing, improves equipment utilization, eliminates organizational redundancies, and improves product design methods and processes.”
The company expects to realize annual savings of $3 billion by 2008, though it acknowledged that severance costs, projected to total about $200 million, will offset some of its savings. It also expects to avoid capital expenditures of $1 billion, by better utilizing manufacturing equipment and space.
Additional information on the restructuring is available online, at www.intel.com.
