The announcement, equivalent to over 5,000 positions, comes a day
after Intel posted a fourth-quarter earnings report that did little
to dispel concerns about a slowing PC industry.
"This is part of aligning our human resources to meet business
needs," spokesman Chris Kraeuter said.
The job reductions may include retirements, voluntary programs and
other options, Kraeuter said, adding that Intel's typical annual
attrition worldwide is about 4 percent.
He declined to say whether details of the changes had been announced
On a conference call with analysts on Thursday after the earnings
release, Chief Financial Officer Stacy Smith alluded to a reduction
in employment this year and said that Intel would increase
investments in areas such as data center technology, low-power chips
Intel dominates the PC chip industry, but it has been slow to adapt
its processors for smartphones and tablets, markets now dominated by
rivals such as Qualcomm Inc and Samsung Electronics Co Ltd.
"If they've got a bunch or resources in a market that may not be
dead but is not growing a ton, it probably makes sense to
reprioritize those investments in areas where there are fast-growing
markets," said Bernstein analyst Stacy Rasgon.
Intel has both added and shed significant numbers of jobs over the
past decade. Struggling to fend off a challenge by smaller rival
Advanced Micro Devices Inc in 2006, Intel announced it would reduce
its workforce by over 10,000 positions, but its overall number of
employees has grown since then.
The chipmaker is also not the only tech company to trim its
workforce because of slowing demand for PCs since Apple's iPad
started to cut into demand for laptops in 2010.
Hewlett-Packard Co is in the midst of a years-long internal
restructuring that would ultimately see it shed 34,000 jobs, or 11
percent of its workforce, through fiscal 2014.
[to top of second column]
Dell succeeded last year in taking itself off public markets,
allowing CEO and founder Michael Dell to restructure away from Wall
Street's scrutiny. That overhaul is expected to encompass layoffs.
Earlier this week, Intel said a newly built factory in Chandler,
Arizona, originally slated as a $5 billion project that in late 2013
would start producing Intel's most advanced chips, would remain
closed for the foreseeable future while other factories at the same
site are upgraded.
In its report on Thursday, Intel forecast March-quarter
restructuring charges of $200 million, a portion of which could be
earmarked for severance pay.
Last September, Intel said it would close an old factory in
Massachusetts, eliminating about 700 jobs.
Intel has said it plans to quadruple tablet chip volume this year to
40 million units and aggressively stake out market share ahead of
future mobile chip launches. Essentially buying its way into
tablets, Intel plans to subsidize its customers' engineering and
manufacturing expenses, effectively reducing its gross margins in
2014 by 1.5 percentage points.
Shares of Intel closed 2.6 percent lower at $25.85 on the Nasdaq on
Friday. They earlier traded down as low as $25.25.
(Reporting by Noel Randewich; editing by
Matthew Lewis and Lisa Shumaker)
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