Human Capital & Careers

Intel Layoffs Reflect Wider Trend

Computer companies delivered the most pink slips in August, announcing 17,371 job cuts, says report.
Stephen TaubSeptember 4, 2006

Confirming widely-published rumors, Intel said it will cut 10,500 jobs. The payroll reductions are part of a larger restructuring, which calls for roughly $2 billion in cost savings in 2007 and $3 billion in annual savings in 2008.

In addition to the workforce reductions, the company expects to cut merchandising expenses and materials. “These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come,” said Paul Otellini, Intel president and chief executive officer, in a statement.

Most job reductions this year will occur in management, marketing, and information technology functions, which are reductions related to the previously announced sale of businesses, and attrition. Intel said the 2007 reductions will be more broadly based, as the chip giant tries to improve labor efficiency in manufacturing, improve equipment utilization, eliminate organizational redundancies, and improve product design methods and processes.

Intel’s layoff announcement reflects a wider trend in Corporate America. According to published reports, Challenger Gray & Christmas identified a 76 percent increase in layoff announcements made by U.S. companies in August, compared with July, according to marketwatch.com. In fact, the 37,178 layoff announcements made in July represented a six-year low, according to the website. Challenger reportedly attributed the surge in job cut announcements to what it calls “an early start to year-end downsizing.”

Computer companies delivered the most pink slips in August, announcing 17,371 job cuts, according to the report. The website stressed that Challenger’s report is unscientific and only represents a tiny fraction of those who lose their jobs each month. For example, in June, 1.51 million workers were laid off, noted marketwatch.com, citing data from the Labor Department.

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