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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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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.




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