Intel announced plans Tuesday to lay off thousands of workers over the next year after a strategic review designed to prepare the company for life with a smaller share of the chip market. The layoffs primarily hit the marketing and information technology departments. The company said it will have 10500 fewer employees by the middle of 2007, as compared to its headcount at the end of this year’s 2nd quarter.
Intel Lowers the Boom on Marketing, IT Departments
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2006-09-05 10:46 pmma_d
I think it’s a preparation for the pc market to expand at a much slower rate, and for the fact that AMD is a serious competitor and not just a 2-bit competitor now.
They don’t have much in other markets like the mobile market (phones, pda’s, etc). And, of course, pc’s are getting cheaper which pushes chipmakers to make cheaper chips: So even if you sell as many chips, they may be at a significantly smaller profit.
I wonder if this will have a negative effect on Intel. Thousands of workers being layed off so they might end up saying Intel sucks. Their friends and family hear about the layoff so they can also say Intel sucks for laying people off. Soon the numbers grow and the momentum takes charge and everyone will say Intel sucks. I don’t think it would really happen like I described, but there has to be some kind of repercussion from something like this.
2006-09-05 10:49 pmSphinx
Every share holder loves a dividend.
Perhaps this is an acknowledgement disguised as a ‘plan’ that AMD have made a serious impact to their business which is sustainable.
…and suck more because large corporations with insane resources cannot make appropriate and TIMELY business decisions to maintain their market share, improve their products, curtail rampant spending, etc. What’s more suprising is that they often make very stupid decisions that everyone ELSE in the world can look at and instantly say “DOH!” And now 10500 people have to find a new job.
2006-09-05 10:59 pmDon T. Bothers
On the positive side, the reason why they hired those 10500 people to begin with is because they were unable to “make appropriate and TIMELY business decisions to maintain their market share, improve their products, curtail rampant spending, etc.” Welcome to the economic cycles, where companies get rich, then get fat (by overhiring) and then are dragged back into the cage and are made once again into lean machine. Welcome to the economic cycle, where employees get fat and lazy, rusty and technically brain-dead, then they are let go and are forced back into sharpenning their skillsets. It is an ugly cycle but the only way to keep humanities natural state of laziness doing something productive. And don’t worry, those 10500 employees will eventually find jobs once they sharpen their skillsets. If not with AMD, then with Fujitsu, Sun, IBM, or Motorolla. You gotta remember, the money Intel is losing is not disappearing, and while Intel is shrinking, others are growing,
2006-09-05 11:18 pmTuishimi
That’s rather zen-ish of you. Or maybe Taoist. But yeah, you are right.
The company hopes to save $2 billion in annual costs by knocking 10,500 employees off its payroll
Who they think they are kidding? The Intel execs like the CEO,predsident,etc can reduce thier huge,huge,huge,huge,huge payrolls instead, so, those people can keep their jobs.it’s better to a executive then anything else.
2006-09-05 11:35 pmtwenex
The Intel execs like the CEO,predsident,etc can reduce thier huge,huge,huge,huge,huge payrolls instead, so, those people can keep their jobs.it’s better to a executive then anything else.
And the last time this happened was…?
2006-09-05 11:55 pmhappycamper
And the last time this happened was…?
I once read on a article, but i can not remember which company it was.
2006-09-06 2:49 amSEJeff
Well I work for Delta as a ‘nix admin and they are one such company you are talking about where the execs took pay cuts too:
He took a voluntary 25% pay cut and no stock options in 2005 to help the restructuring (also known as bankrupcy)
2006-09-06 10:08 amkaiwai
But then again, alot of the managers are over paid; I think the best example of leadership was of the man who is CEO of a steel company, he takes home a modest (compared to others) $300,000 salary, and thats it.
Maybe its time that some of the management on wallstreet, took onboard some catholic-socialist like ideals, and realise that they don’t need to earn $6million per year, they don’t need the moutains of cash.
If they need all that to keep them with the company, as a shareholder, I’d sooner have someone in charge of a company who is passionate and driven to want to make the company the best it can be rather than simply hanging around for the fringe benefits.
Edited 2006-09-06 10:13
2006-09-06 12:25 pmchrish
Isn’t Steve Jobs’ salary still $1/year?
Sure they bought him a jet a while back…
Problem is, when the company is doing well, all hiring and spending constraints get relaxed, and they hire far more people, especially in areas not related to the design and production of product, than they need. Even in design they end up with too many people. All these people are very busy. They generate endless emails and memos and hold meetings. They are well intentioned – they’re doing their best.
The result is that after the fat years, you have a company with the parking lot full at 7pm, everyone working very hard, and less and less coming out.
Finally, in fear and trembling, and accompanied by fierce opposition and predictions that he will be ripping the heart out of the company and it will all be a disaster, some brave guy eliminates whole departments. The sad part is, its not their fault, they just should not have been hired in the first place.
Monday morning everyone comes in, and heaves a sigh of relief. At last, they can get some work done. This is the classic problem at MS, the other half of the former PC duopoly. They must have at least one third more people than they need. We will know that reality has hit the PC business when they do the same.
…and it shows that Intel will not hesitate to make the necessary changes to be more competitive. This is, after all, marketing guys, not engineers etc. so IMO they made the right choice. It’s better to step in early and save the company then to stand back and watch it sink.
Right here on I believe this very forum several years ago people were talking about how AMD was just a bunch of wannabes, just a gnat in the world of chips that could be swatted away whenever Intel wanted to. Intel just allowed them to survive because they didn’t want to get into trouble for being a monopoly. Besides they just were the low end chips. “I have seen chips that Intel is holding back that would blow your mind. They can release them whenever they want and crush AMD.” I think that was one of my favorite quotes.
Another player that has been stealing market share is Texas Instruments. Yes, that has been, has managed to completely crush Intel in the mobile market and small gadgets. While that may not seem important their CEO had an interesting quote. “We are not after the pricey PC CPU. We are after the little chips. Your typical young adult now has 5 of these little chips on them.” Not such a bad market after all.
Here is an economic lesson for you. Once upon a time US Steel completely dominated the steel industry. They decided that making rebar was not worth doing and pretty much ceded the market to several small companies. The small companies worked like mad to be able to make rebar efficiently. Eventually they did. Then they moved on to doing other things. By the time US Steel saw the threat they were behind the curve and the small efficient companies managed to steal a large chunk of the market before they got their act together.
Someday the same thing will happen to MS. They have the biggest pie and are the biggest target. A host of companies from small mom and pop shops to mighty IBM are after their lunch. Someone will take it.
6000 will retire/move on and so forth like every year
2000 were let go already a month ago or so
so they only laying off 2000
Edited 2006-09-07 14:36
Even if the execs take pay cuts, so what. They make enough as it is, even a 25% cut won’t hurt them. Take 25% away from the lower workers and they’d be hurting real bad.
…smaller share of the chip market? Seems odd with x86/amd64 carrying all before it.