Intel to axe 1,000 management jobs in cost reduction bid


Sat, Jul 15, 2006 - Page 10

Intel Corp is cutting 1,000 management jobs as the chip maker tries to become more efficient amid stiff competition and weaker demand for personal computers.

The reduction, which will take several days to be carried out, is the latest action in a broad restructuring announced earlier this year, Intel spokesman Chuck Mulloy said on Thursday. Analysts expect further job cuts as executives continue to scrutinize operations.

Mulloy declined to say how much money will be saved by the latest cuts or whether they would result in a charge against earnings. The company will provide more details on Wednesday, when it reports second-quarter results, he said.

ThinkEquity analyst Eric Ross, who recently released a report predicting Intel would reduce its work force by more than 10,000 employees, said the Santa Clara company is scrambling to slash costs as smaller rival Advanced Micro Devices Inc encroaches on its highly lucrative core business of supplying the microprocessors that act as the brains of computers.

"They need to cut costs and they need to do it fast," he said in an interview.

Ross, who estimated Intel had about 100,000 employees following the sale of one of its business units last month, predicted executives will announce plans to pare another 9,000 employees in the next six months.

In April, Intel reported a 38 percent drop in first-quarter profit as demand slackened for PCs and microprocessors from AMD continued to steal market share.

That same month, chief executive Paul Otellini vowed to spend the next 90 days identifying underperforming business groups and cost inefficiencies in an effort to save the company US$1 billion a year.

He said he planned to make changes as his analysis progressed, rather than waiting until the end of his review.