Intel to slash up to 20,000 staff

Stan Beer
Saturday, 02 September 2006 08:08

IT Industry - Strategy

Next Tuesday will be D-Day for up to 20% of the staff number one chipmaker Intel, as the company is tipped to slash as many as 20,000 jobs in a massive restructure designed to get its business back on track.

Faced with poor financial results and a looming threat from its smaller but more nimble competitor and faster growing competitor Advanced Micro Devices (AMD), Intel CEO Paul Otellini has gone through the company like a dose of epsom salts in an effort to cut away US$1 billion of dead wood.

The coming long week-end in the US looks to be a bleak and tense one for Intel staff, expecially those working in marketing, middle management and areas outside of the company's core processor and chipset businesses.

Over the past two years, Intel, which spends five times as much on infrastructure development annually as its neighbouring Silicon Valley competitor AMD, has seen its market share decline to the point where AMD has gone past 20% market share and perhaps even higher, according to some analysts.

AMD CEO, Hector Ruiz, has set a goal of achieving 30% marketshare by 2008 and to many that no longer appears to be a pipedream.

While Intel has just delivered its next generation of dual-core processors for the notebook, desktop and server platforms, in the interim the damage has already been done, with AMD managing to get its foot in of every large hardware manufacturer. Dell, the last holdout, has indicated that it intends to make AMD part of its strategy going forward, starting with servers and eventually extending into its other platforms.

Intel started its culling process in July, when chopped 1000 managers from its staff list.