Intel Corp said on Thursday that it planned a sweeping restructuring aimed at greater efficiencies and reduced costs in an effort to get back on track after another quarter of declining profit and lost market share.
Paul Otellini, Intel's chief executive, said that executives would review every aspect of the company's operations within 90 days, but that they would not wait until then to start making changes.
"You will see a leaner, more agile and more efficient Intel," Otellini said, addressing a meeting of financial analysts in New York that was relayed online. The restructuring will focus, among other things, on manufacturing costs and identifying weak business units, he said.
"We are starting a detailed review of all the businesses that have been losers with a much tougher eye than we have before," said Andy Bryant, Intel's chief financial officer.
While the executives did not comment directly on layoffs, Bryant said the company would seek personnel reductions "by attrition." A company spokesman said Intel had imposed a hiring freeze in the current quarter.
Intel's work force has grown substantially the last few years, to nearly 100,000 employees at the end of last year, as the company continued to invest during the industry downturn. The company ended 2004 with 85,000 employees.
The statements came just one week after Intel reported a 38 percent drop in profit, to US$1.35 billion from US$2.18 billion last year, and a 5 percent drop in revenue, to US$8.9 billion. Otellini said then that the company would cut its costs by more than US$1 billion this year.
Company executives said on Thursday that Intel ended the first quarter with excess inventory of several million units, but that they were confident they could get inventory levels back to normal this year.
Intel also said it was slightly advancing plans for delivery of a new core architecture that it hopes will put its microprocessors on a par with its rivals.
Bryant said on Thursday that its new chip technology for servers, called Woodcrest, would come in June, while its processor for desktop computers, code-named Conroe, would arrive in July, and its new chip for notebooks in August. The company had previously said only that the products would arrive in the third quarter.
It is in the server market that Intel has had its sharpest decline in market share.
"For the first half of this year, we are focused on clearing out inventory and ramping our new products," Otellini said. "We absolutely focused on winning back market share."
By speeding up delivery of its newest chips, Intel hopes to stave off additional inroads by Advanced Micro Devices Inc.
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