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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."
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.
That lame dancing by the clowns in the aluminised bunny suits will not be missed. Hooray for competition, this clearly signals the end of the monopoly. Hopefully this trend will continue to the desktop OS (or more properly, Program Loading Environment with a bunch of device drivers) market.
I think Intel is going to make a comeback and crush AMD. Here is why I think that: Imagine a world where Apple is pushing more boxes then Dell and all of them have an Intel Chip inside. They are only hurting right now because of the tiff they had with MS over their new 64 bit design. Developers did not like it since it had a totally different instruction set. With all the trouble with their new chips MS decided to put their full force behind AMD, and Intel suffered. It is too bad that such a large number of people are going to be out of work now :(
I am sure the top echelon of Intel will take massive pay cuts also...yea right...they will get multimillion bonuses for firing so many people.
Windows Admin Tools
Middle management is a great waste of skin. Plus they often take a fairly large salary while not generating revenue or a product.
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
Someday, I'll have a real sig.
Quit Your Job Day, Sept 18th.
The goal of Quit Your Job Day is to reverse the advantage perpetuated by an elitist class who profit from your actions without making any personal investment in you as an individual. If you don't know who profits from your hard work, I assure you that they care very little about you. You are just a line on a spreadsheet and if cutting your salary would make the column balance, you're fired.
http://www.quityourjobday.com/
...Intel's re-hired the Blue Man Group to perform at the goodbye party.
That's sooo Osama bin Laden.
They have been laying or selling off in their telecom chip business since June.
Back in my day, we remained competitive by building a superior product at an affordable price, up-hill both ways!
/get off my lawn
"People should be allowed to keep midgets as pets."
- Gov. Jesse Ventura
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?
I have a neighbor who works at the Intel office here in the Silicon Valley and she's known for quite a while that these were in the works. IIRC, she was talking about this back in April or May.
One thing that I've always thought about company layoff planning is that there's a difficult choice to be made over when to notify employees that a layoff is in the works. Too little notice and people feel like they're being dumped without warning, too much and you have a long period of tension and a lot of people slacking off because they know that they're headed for the unemployment line.
When I worked for a division of a major company that was planning layoffs, we all knew in June that the offices in California were going to be closed by the end of the year, and offical notice came in October. The company did something that I considered a stand-up thing: they told us who was going (in October) and gave us official permission for the rest of the year to look for work using company resources. It was cool for them to give us that much notice (though because of the slow market at the time, it was hard to find work even with such a long lead time). However, a lot of employees (including ones who really were supposed to be doing something else) spent the time building houses of cards out of their company business cards, driving remote-controlled cars around the cubes, and generally goofing off.
Again, it was a cool thing for the company to do (and I am aware that there are financial incentives for getting your employees hired off before closing an office--but I don't think those offset the cost of paying them salary for three months) but I can see that there are employers who couldn't afford to do that.
Here's hoping all the folks getting pink slips at Intel can find something else to do as quickly as they'd like.
Interested in a Flash-based MAME front end? Visit mame.danzbb.com
I don't see why laying off people would make them more competitive against AMD. Sure, their HR department will have less work afterwards, but they're not the ones who will make Intel more competitive.
This is just to make the actions go up and make the investors richer, but it won't make them more competitive to AMD, and more attractive to customers.
My compassion will to the laid off employees, and my money will go to AMD when I'll buy a new chip.
1 in 10? Why, they'll be decimated!
-Grey
Silver Clipboard: Time Management Tips
Back in '00 or '01 Intel bought the DEC Alpha group that was a step in the right direction. But from reading the INQ it seems that most of their projects were canceled and by now most of the top Alpha architects have quit.
Every company has dead weight - larger companies have more dead weight. I would hazzard a guess that large companies actually have a higher percentage of dead weight because a non-productive person can hide easier within the system. In a smaller company the dead weight is more easily noticed.
The key is to identify the dead weight and jettison then every so often. Intel has such a back-log of getting rid of dead weight they need a major laxative to clear their tubes. The difficulty is to not lose the good with the bad (no baby, yes bathwater) - thus they need to watch out for teacher's pet syndrome (ass-kissing dead weight is kept).
Programming: Its not just a job - its an indenture.
So let me get this right: the plan was to wait until after the stock market closed Tuesday, then announce, so people don't run around dumping stock like headless chickens?
And The Reg, Reuters and Slashdot have got it now?
I love it when a plan comes toge... oh. Ah. Well, errrmmm.... if you work for Intel, have a GREAT weekend, and if you own shares, well, you've only got some 20+ hours trading to go before the announcement, so take your time...
>> The days of producing quality, reliable, affordable consumer goods are over.
Yeah. My pre-globalization, 1958 Edsel has far superior quality, reliability, and affordability compared to my post-globalization 2006 Honda Civic.
Just junk food for thought...
I doubt they will be laying off much if any of their chip design talent. This is probably managerial and administrative staff throughout the company (general IT, accounting, call centers, etc...) People who can't really provide a comptetive advantage to another chip maker and most like don't even have non-compete agreements.
-- Jason
Special bonus question: Will step 5 ever execute?
Sig removed because it was obnoxious
This maybe purely hearsay but i've heard that some of the ppl being laid off were given an option of relocating to an offshore intel group (india/malaysia/israel) where the remuneration in US$ is much less - this way they get to keep the people in, and cut back on the budget as well. the wonders(curse?) of globalization!
My sig has been answered.
the answer is, healthcare, biology, nanotech, security and disaster recovery, alternative energy and energy storage, mass transit, ubiquitous networking and communication, hedge funds, supply chain and distribution logistics, and probably not a few other fields I missed.
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.
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I think Intel has more class than some other companies.
Despite your optimism, I was spot on with my prediction.
Many other companies in the past, including one I worked for, begin by slashing managers. Then they consolidate operations under a new management structure and then the big cut happens as the attempt to eliminate "redundant" operations and employees. This is a tricky thing to do because sometimes they cut out keystone employees which are their real foundation and founder a bit. Expect another round in about a year, after Intel senior management have reviewed how things are going.
The disruption will mean Intel will struggle with overcoming internal reshuffling, which is to AMD's advantage.
On a more cynical note, It's worth remembering that a shrinking company is more profitable, in the short term. Ever notice how stock initially goes up when these moves are made?
A feeling of having made the same mistake before: Deja Foobar
You've got the algorithm wrong. This one is none standard.
The bonus question should be: When does this unsustainable model collapse?
Just how long can the rich get richer and still sell stuff the poor who are getting poorer?
"The last thing I want to do is deal with a bunch of people who want something."
Major Major
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.
Link to your prediction, instead of just the story: Only the First Shoe to Drop.
That Slashdot story linked to a Forbes story about Intel laying off 1000 managerial positions. That was an admission that Intel has been badly managed in the past. Otherwise, how could they have 1,000 managers they don't need?
They don't need to fire thousands. They need to fire Intel CEO Paul Otellini. He has made Intel more adversarial toward its employees, and therefore less efficient. Intel employees spend a good part of their time and energy defending themselves rather than working.
Intel CEO Paul Otellini is AMD's most productive single employee, by far.
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.
paintball
Intel marketing is an example of Intel's unbelievably, extremely, amazingly bad management. The major problem is not to get rid of the time wasters in Intel marketing, the major problem is to get rid of the top management that let Intel marketing become the joke that it is.
Intel's board is obviously incompetent, and obviously not paying attention. The board let the stupidity happen.
Intel marketing is so disgusting that it is difficult to find words that are negative enough. Here is an example that paraphrases an actual Intel marketing email: "Jump through hoops and get an Intel BunnyPeople(TM) doll." Yes, hmmm, hmmm, ahem, Intel did lots of high-level research and analysis and determined that the people who make decisions about processors and motherboards also collect dolls! So, giving away dolls is an effective marketing tool! NOT!
Don't worry about the fact that the Intel web site is a mess, Intel markets processors with deliberate product confusion (What's an Intel 531 processor?), and Intel marketing people are the most dedicated work avoiders I've ever known.
Someone should step forward and say this about the Intel board of directors and CEO, and it might as well be me: Craig R. Barrett, Paul S. Otellini, Ambassador Charlene Barshefsky, E. John P. Brown, D. James Guzy, Reed E. Hundt, James D. Plummer, David S. Pottruck, Jane E. Shaw, John L. Thornton, David B. Yoffie, you are incompetent! You let Intel marketing become the waste of time and resources that it is!
Here a few of the qualifications of the board of directors, according to the Intel web site:
CEO Paul S. Otellini: Has an MBA. Can someone with no technical training run a high-technology company? No need to understand what you "manage", right?
Ambassador Charlene Barshefsky: On the board of directors of Estee Lauder, a company that manufactures makeup and therefore encourages women to live in a fantasy world. Maybe she has influenced Intel marketing to live in its fantasy world. "She is also a member of the Board of Directors of the Council on Foreign Relations", it says, and we all know the quality of the U.S. government's foreign relations.
Dr. Jane E. Shaw: Experienced in running pharmaceutical companies. Would such a person notice if a high-tech company's marketing is a joke? No.
David B. Yoffie: Professor of business administration. Would such a person notice if a high-tech company's marketing is a joke? Uhhh, what's a processor?
E. John P. Browne: Helps run BP, formerly British Petroleum. The company is apparently part of the reason for the Iraq war. The idea, apparently, was to invade the country with the second-highest proven reserves of oil in the world, and restrict the production so that the price of oil would go up. This also benefited Dick Cheney and George W. Bush, whose friends and family and business associates are heavily invested in oil and weapons. See the free Google video, Robert Newman's History of Oil. The U.S. taxpayer pays and pays and pays.
Reed E. Hundt: A lawyer.
David S. Pottruck: Knows the stock market. "In July of 2004, Mr. Pottruck resigned after a 20-year career having served as President, Chief Executive Officer and a member of the Board of the Charles Schwab Corporation." Does that prepare him to understand the needs of a very, very high-tech company?
Boards of directors usually do not have enough education, time, or interest in the companies they "direct" to do a good job. The entire board of director system is out of control. But Intel's board of directors is especially inappropriate.