Print 26 comment(s) - last by Trisped.. on Jul 14 at 1:25 PM

Intel thins the herd

Intel has announced plans to fire 1,000 managers in a bid to help the company save $1B USD. A number of investors were expecting to see as many as 15,000 employees axed worldwide. While Intel has seen some recent gains in the retail market, AMD has been surging in sales volume for the past year and Intel's shares have taken a nearly 30% nose dive since the start of the year.

Intel last thinned the herd in 2002 when it slashed 4,000 jobs. "You should expect that we will continue to take actions, including selective reductions, as we complete analyses and decisions about investments, expense levels and organizational structures. Over the last five years at Intel, the number of managers has grown faster than our overall employee population. Our efficiency analysis and industry benchmarking have shown that we have too many management layers, top to bottom, to be effective," said Otellini in a memo to employees.

News of the job cuts comes just weeks after Intel announced that it was selling its Communications and Applications Processor business (i.e. XScale processors) to Marvell for $600 million. Intel has also been in the news recently over allegations of anti-trust violations in Germany. On a lighter note, Intel has also given us a peek at 32-core processors, the next generation of WiMAX and the company is set to announce its Core 2 Duo processors for the desktop.

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By Lonyo on 7/13/2006 5:00:10 PM , Rating: 3
Good for Intel. Managers = big waste.

RE: Sense!
By shadowzz on 7/13/2006 5:01:26 PM , Rating: 2
The Iraqi army said that about non-commanding officers too.

RE: Sense!
By Boney on 7/13/2006 5:01:49 PM , Rating: 5
Good for Intel. Managers = big waste.

YYyeeaaa ...... Im gonna need you to come in on Saturday.

RE: Sense!
By SunAngel on 7/13/06, Rating: 0
RE: Sense!
By Brandon Hill on 7/13/2006 5:16:10 PM , Rating: 2
That would be greeeeeeeeeeat...MMMKay!

RE: Sense!
By creathir on 7/13/2006 5:50:33 PM , Rating: 2

By Homerboy on 7/13/2006 5:05:53 PM , Rating: 2
15,000 overall... tough times at Intel.

RE: Wow
By TomZ on 7/13/2006 5:50:21 PM , Rating: 2
1. Intel hasn't announced 15,000 job cuts; they announced only 1000, which is only 1% of their workforce (99,900 in 2005).

2. Cost cutting and re-organizing is also something that healthy organizations regularly do. It is not necessarily a sign of "tough times."

RE: Wow
By deeznuts on 7/13/2006 6:26:02 PM , Rating: 2
Yup, that's why when there are a round of cuts, if the company is in generally good health, and it isn't a bear market (i.e. last two days) there is an uptick in their stock price. Tough times is relative, it's not as fruitful as it was in years past, but they haven't been in the red in a long time IIRC.

RE: Wow
By lemonadesoda on 7/13/2006 6:53:05 PM , Rating: 2
It's all spin. With 99,900 employees, more than 1000 will leave of their own accord, through retirement, new jobs in other companies, and just plain dismisal for incompetence.

Given typical number of years (average) that an employee stays with the company, which is approx 4 years, then:

In fact, you just change your hiring policy, which is that all vacant positions must be left vacant for 365*1,000/(99,900/4) = 16 days, and bobs-your-uncle! You made your target.

RE: Wow
By TomZ on 7/13/2006 8:21:38 PM , Rating: 2
Good point.

RE: Wow
By masher2 on 7/13/2006 10:22:56 PM , Rating: 2
> "It's all spin."

It's not spin. Cutting *positions* is what affects the bottom line. Those 1000 positions are gone forever, even if the actual means of freeing the slots up is attrition. Without the cuts, a person who quits, retires, or is fired for cause is **replaced**.

Or "backfilled", to use the crude term.

Bob & Bob
By Howard on 7/13/2006 5:01:44 PM , Rating: 2
So, what would you say you do around here?

RE: Bob & Bob
By Ender17 on 7/13/2006 5:33:30 PM , Rating: 2
I'd say in a given day, I do about 15 minutes of actual work.

RE: Bob & Bob
By FrozenCanadian on 7/13/2006 6:57:52 PM , Rating: 2
I'd say in a given day, I do about 15 minutes of actual work.

Wasn't it "In a given week". Could be wrong.

RE: Bob & Bob
By bbomb on 7/13/2006 7:46:44 PM , Rating: 2
Uuuuuuummmmmm yyyyeeeeeaaaahhhhh. I only maybe 15 minutes of real actual work in a given week.

RE: Bob & Bob
By bbomb on 7/13/2006 7:45:47 PM , Rating: 1

By MagnusTheBrewer on 7/13/2006 7:53:17 PM , Rating: 2
Getting rid of 1000 managers and hope to save 1 billion? Wow! Their benefits must be worth 3 times their salary. I sure wish I could be fired from a Million dollar paycheck.

RE: Salaries
By TomZ on 7/13/2006 8:21:11 PM , Rating: 2
Intel has announced plans to fire 1,000 managers in a bid to help the company save $1B USD

"To help the company save" is not the same as "To save" - this is just one area of savings apparently.

RE: Salaries
By mdbusa on 7/13/2006 9:35:07 PM , Rating: 2
benefits are substantial and the cost of firing people is very high--It will actaully cost them more intitialy and the savings will come later--several months later--but what this really shows is how fat and complacent Intel has become.

I like it when shareholders fight back against management and demand that changes be made--we need more of that

RE: Salaries
By OvErHeAtInG on 7/14/2006 12:03:55 AM , Rating: 2
Erm, yah, damn employees. think they deserve a job. Need to be put in their place. Besides, I love it when a horde of middle managers from a Fortune 500 company are let loose into the job market. It makes it so much easier for me to find work.

"Fight back" against management. Those poor darn institutional investors, always getting browbeaten by the HR lady.

Lackin content...
By crystal clear on 7/14/2006 4:02:18 AM , Rating: 3
Either this article is badly researched or simply not
composed properly.
No details are given which type or catergory of managers
are being layed off.Are they in the marketing or R&D or
production or other dept/which division etc etc.
Just taking an announcement "1000 managers are to be fired,
& adding some non relevant details-bingo you have a article
to post on the web.The responses are equally dumb-All jump
out of their chairs happy & cheering.
This article lacks the necessary contents-We all know Intel
is laying off staff/closing complete divisions or selling
them off etc etc.
Put some quality in your articles pls .

Fighting Form
By Boney on 7/13/2006 4:55:57 PM , Rating: 2
This is basically like Ali trimming down before the big fight .....


Common Stuff
By INeedCache on 7/13/2006 10:26:03 PM , Rating: 2
This is commonplace. Every few years a company takes a harder than usual look at personnel, and they usually find they have accumulated some fat. So they then proceed to boil it off, as Intel is doing here.

Only the first shoe.........
By kilkennycat on 7/14/2006 1:34:20 AM , Rating: 2
Many companies fire lower-level employees before managers, since managers become very adept at CYA....a Management 101 required skill. So this is a very interesting FIRST move by Intel to rapidly streamline their organization. Expect significant lower-level employee layoffs to follow, since the loss of many of these management positions will also mean the closure of complete departments. On average Intel had 8-10 employees reporting to each manager, so expect to see a final layoff/early retirement number of ~ 10,000.

Stupid Intel
By Trisped on 7/14/2006 1:25:09 PM , Rating: 2
So, since Intel PR and CEO's made a stupid decision with P4 processors, 1000 managers (middle management) personal lose their jobs. The reason? They wanted to balance the number of managers they had with the number of employees. Why fire when you can re-assign? It sounds to me like Intel is just trying to get rid of certain people, and axing the whole department lets them do it with out a law suit.

So what percent of the lost jobs are Americans? Didn't I just read about a month ago that you are investing in thousands of new Employees in middle eastern countries? Yeah, it isn't hard to see what Intel is really doing, just hard to do anything about it.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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