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.

Re:Hopefully not by email

[Jahz]

They've had competition of a serious nature for several years now at least. That (by itself) doesn't seem to justify the layoffs.

Of course not, but who said that was the only reason? Intel may have had competition from AMD for a while, but Intel are just now starting to take that seriously. Intel hung on to the P4 - against a constant AMD barrage - for a really long time. But in the past year AMD has beaten Intel to the affordable 64-bit chips, affordable dual-core chips, affordable enterprise-class server chips (opteron), and affordable preformance chips (overclockers, gamers).

I will admit that the last 4 computers I have built for myself wore a sticker that read "AMD Inside." Most recently, in Feb of this year, I constructed a PC that ran a dual core AMD Opteron processor (165). On the first boot I cranked the core speed from 1.8ghz to 2.5ghz and its been running smoothly ever since. Thats a great chip, and it only cost $2xx USD, whereas the equivalent P4 at the time was near 850-1000 USD.

I will also say that I am extremely pleased with Intel lately. The archetecture of the "Core" line of processors is really cool. They are fast, dual-core, and low power. To me, this symbolizes the first REAL response to AMD by Intel.

I have spoken to people who worked as engineers at Intel. Some of the projects were really cool, but most never made it out of the labratory. Intel is an R&D firm... they do great research. I hope the layoffs don't really affect that part of the company.

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

Do it back to them.

[neo]

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/

Re:Do it back to them.

[Overzeetop]

That's why there are Unions. And, as typcially happens, the Union becomes exactly what the employee hated about management - a political, bottom line driven organization used to forcefully extract concessions from the opposite side. They're just working for you instead of the other side now.

It all comes back to monkeyspace. Big corporations exceed it, and need a kick in the pants (or regulations) to return balance. That's one reason why many small businesses are not regulated, and why many don't need it (oh sure, some do...some really do) - the 50 employee limit is within a standard human monkeyspace.

Re:Intel will beat down AMD

[raehl]

Well, maybe all those qualified engineers will go on to find jobs that are more productive, and build better things for society.

Unfortunately, successful companies have a bad habit of hiring people to do new projects 'because they can'. The money is there to hire more people, so, they hire more people. The more successful the company is, the less scrutiny is applied to how likely the new proect is t result in actual new revenue for the company.

After enough of this, the company finds itself burdened with a lot of labor working on things that are not really relevant o the company's main business, which negatively impacts the company's performance, and ultimately forces a layoff.

It would be better, of course, if sucessful companies could avoid the temptation in the first place and give that money to shareholders.

Re:Intel will beat down AMD

[Ubergrendle]

What are you smoking -- I'd like some!

First off, Apple has between 5-6% of the total PC base in the world right now. They have a loooong way to come even close to matching ONE of IBM (Lenovo), HP, or Dell. Intel made a nice marketing coup with lining up Apple, but its no panacea of profit.

Two, yes Intel goofed on the 64 instruction set. But WinXp runs on Athlon and Pentiums, and there's very little real 64 bit computing taking place on corporate desktops even today. Intel needed to make cheaper, faster, more efficient processors -- something they've finally done with the dual-core. Both server and desktop segements will do benefit from the latest designs.

Strikes me now that Intel finally has a decent product in the marketplace again, they're cutting back on R&D since they're 'in the game' once again. When you're behind, you have to spend money to catch up. Allowing AMD to beat them for so long on price and performance had to be galling to a company the size of Intel -- someone was asleep at the switch.

I love competition, I think Intel is in for some good times now, but I doubt they'll ever be as dominant as they were in the early 90s ever again. AMD has their work cut out for them, but getting where they are today was MUCH harder than what they're facing now.

This is hardly news.

[Plammox]

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

Is this how companies compete now?

[Trollificus]

Back in my day, we remained competitive by building a superior product at an affordable price, up-hill both ways!

/get off my lawn

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?

This is old news to people at Intel

[blueZ3]

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.

More competitive?

[jb_nizet]

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.

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.

Deff

[Wellington Grey]

1 in 10? Why, they'll be decimated!

-Grey

Re:Brilliant...

[Coward the Anonymous]

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.

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.