Intel to Lay Off Thousands

symbolset writes to say that "Intel is expecting to lay off 10% of their workforce in a move to become more competitive against rival AMD. From the article: 'The Santa Clara, Calif.-based chipmaker, having suffered several financially disappointing quarters, launched an internal analysis in April to find ways to increase its efficiency. [CEO Paul] Otellini is scheduled to announce the results of the analysis, including the layoff, on Tuesday after the stock market closes, sources familiar with the plans said. Intel has about 100,000 employees worldwide, so the cut could be as high as 10 percent of the company's staff.' Coverage also at The Register, internetnews.com, and more as it develops at Google News. Reuters has the number at up to 16,000."

Comments

Hopefully not by email

[mgblst]

I think Intel has more class than some other companies.

But this is still a huge number of people to get rid off. Don't they do these sort of checks all the time, on a department basis. This sound more like a simple reaction to we can't do anything better, so we will fire people. A bad solution to a problem if you ask me.

Re:Hopefully not by email

[sjwaste]

A bad solution to a problem if you ask me.

Close, but not quite. When they had less competition, they probably just threw people at problems their current staff couldn't solve. Now that there's competition, they have to cut back. The simple reaction you talk about was probably needlessly throwing people at problems in the past.

Re:Hopefully not by email

[hiroller]

It seems like a knee-jerk reaction to me. They're losing money and they don't want to scare off the investors. Easiest way to do that is to reduce the money flowing out of the company which usually means layoffs. Less salaries gives the appearance of more profit margins

Everytime, I hear of layoffs though I always think of Office Space

Peter Gibbons: You're gonna lay off Samir and Michael?
Bob Slydell: Oh yeah, we're bring in some entry-level graduates, farm some work out to Singapore, that's the usual deal.
Bob Porter: Standard operating procedure.
Peter Gibbons: Do they know this yet?
Bob Slydell: No. No, of course not. We find it's always better to fire people on a Friday. Studies have statistically shown that there's less chance of an incident if you do it at the end of the week.

http://www.imdb.com/title/tt0151804/quotes

Re:Hopefully not by email

[RetlawST]

I've never been a fan of mass layoffs, but we don't know how long this has been in the making. Hopefully Intel has audited well and doesn't end up severing it's own foot in order to escape from the trap. I feel bad for the employees, but layoffs are going to happen at a large company when things start going south. Hopefully Intel is classy and gives them enough time to find new jobs/promise to rehire if things get better.

Don't start with the little guys.

[Anonymous Coward]

Middle management is a great waste of skin. Plus they often take a fairly large salary while not generating revenue or a product.

Friendly tip from a competitor

[tomstdenis]

1. Get with direct link interconnects, FSB is teh stupid
2. Stop making a new core every other Tuesday, m'kay?
3. 4MB of cache is nice, but it has to be hella expensive right? [*]
4. Merge with Nvidia, totally mess up the PC scene, it'll be fun :-)

[*] Don't look at the retail cost for the true margins they make [if any] on the cores. Selling at a loss or near loss is not a new tactic.

Tom

This is hardly news.

[Plammox]

They have been laying or selling off in their telecom chip business since June.

Not knee jerk

[cryfreedomlove]

This probably is not the simplistic knee jerk reaction that you describe. I'm sure that any of us could identify a lot of redundancy or simple non-performance in any organization of 100,000 people. If you were running an organization with redundancy and dead wood and you were faced with competition from AMD then what would you do?

Re:More competitive?

[jank1887]

10,000 employees, estimate $100,000 per year total expenses per employee = 1 Billion dollars per year saved. If you can minimize the negative impact of that cut on your budget (i.e., drop money sucking programs, keep production/sales at a status quo, etc.) then you have increased your yearly net profit. Profit = competition resource. More competition resources at your disosal = more competitive.

If needed and done right, it's the way capitalism is supposed to work. If it's just a wall-street ploy and actually hurts other areas of their bottom line, well, poo on them.

Re:Intel's lose is another's gain?

[robertjw]

Sure they're not going to fire they're really good workers

Actually, that may not be a good assumption. Often in engineering industries the more experienced workers are the first to be laid off. A company can hire two or three bright-eyed bushy tailed college grads for the price of one engineer with 20 years experience.

Intel: formerly great, now the US Steel of Tech

[gnetwerker]

This is, as others have observed, long overdue. When Intel could maintain a dominant market share, and thus pricing power over its competition (primarily AMD), it could afford to be (or try to be) a broad-based technology company: i.e. one that invested heavily in new technologies and speculative businesses that were not necessarily on a direct path to their primary (semiconductor) products. The largest (and most wasteful) of these investments happened during Craig Barrett's regime as CEO, and it was these that were most desperate and ill-advised. These included Intel's $500m+ investment in trying to be a hosting service, its attempts to be a low-cost end-user peripheral maker, a toy manufacturer, a maker of LCoS-TV chips, and numerous other misbegotten adventures far from its core competence.

What Intel is at heart, and will be for some time, is the world's best high-volume manufacturer of semiconductors, something that requires a far, far lower load of white-collar workers than being a broad-ranging technology company. Intel will continue to be a great producer of an important product, but only in the sense that (e.g.) US Steel was once a great producer of an important product. Intel is on the path to irrelevance as a technology force. This is why its P/E is 17x and not, for example, Google's 55x or even Microsoft's 21x. Look for it to trend upward in the short-term, but in the longer term settle toward US Steel's 8x.

Also note that recent management changes have elevated Sean Maloney into an heir-apparent position. This signals the fin de siecle, completing the transition from an engineer/scientist leader (Andy Grove) through a manufacturing guru (Barrett), to a bean-counter (Otellini), ending with a salesman (Maloney). How the mighty have fallen.

Pile of Crap.

[raehl]

Disclaimer: I am an actual engineer.

Middle-management is essential to getting my job done. I don't want to have to negotiate with the tool vendors on price or licenses. I don't want to have to evaluate how well people are performing. I don't want to have to find, interview, and hire new employees. I don't want to do the department budget, set the schedule, fight to get materials on time from vendors, etc, etc. And, most importantly, I don't want to have to explain what I'm doing to upper management.

Now, some managers are definitely useless, but so are some engineers. That's not a job-level problem, that's a people problem.