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Analysts predict Intel will lay off at least 10,000 staff

COST-CUTTING Market pundits expect the global chip giant to announce a 10 percent cut in its workforce on Tuesday in a bid to slash costs after losing market share


Intel Corp chief executive officer Paul Otellini will fire at least 10,000 more workers as part of a plan to slash US$1 billion in costs this year, analysts including Mark Edelstone at Morgan Stanley predict.

Otellini will announce the cuts on Tuesday when he discloses the results of a 90-day internal review begun in April, CNET said.

The review's conclusions will be made public before the end of the third quarter, Intel spokesman Chuck Mulloy, who declined to comment on the report or on possible firings, said late Thursday.

Edelstone predicts that Intel, the world's biggest semiconductor manufacturer, may reverse a hiring binge that added more than 20,000 employees since 2003.

Other analysts, such as David Wu at Global Crown Capital in San Francisco, said Otellini has to eliminate 10,000 jobs, about 10 percent of the workforce, in addition to 3,000 cuts already announced, to satisfy investors.

"It would be seen as lame if Intel does less than 10,000," said Wu, who rates the stock "overweight" and owns shares.

Otellini, 55, began in April what he called the biggest overhaul since the 1980s after forecasting Intel's first annual sales drop in five years.

While Intel geared up for creating new markets for its personal computer processors, it lost sales to Advanced Micro Devices Inc, which took more than 20 percent of the PC processor market last year, the first time in four years.

Intel on July 13 said it would cut 1,000 managers worldwide, the biggest reduction in four years, to help restore profit growth. The company also announced the sale of two communications units that would cut 2,000 more people from the payroll.

"Ten thousand would be at the low end of everyone's expectations," said Doug Freedman, an analyst at American Technology Research in San Francisco who has a "buy" rating on Intel's shares and doesn't own any.

The company last announced a round of workforce cuts in 2002, when it shed 4,000 jobs. Intel ended last year with 99,900 workers, according to a regulatory filing. That was a gain from 79,700 in 2003.

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