Intel to Lay Off Thousands

symbolset writes to say that "Intel is expecting to lay off 10% of their workforce in a move to become more competitive against rival AMD. From the article: 'The Santa Clara, Calif.-based chipmaker, having suffered several financially disappointing quarters, launched an internal analysis in April to find ways to increase its efficiency. [CEO Paul] Otellini is scheduled to announce the results of the analysis, including the layoff, on Tuesday after the stock market closes, sources familiar with the plans said. Intel has about 100,000 employees worldwide, so the cut could be as high as 10 percent of the company's staff.' Coverage also at The Register, internetnews.com, and more as it develops at Google News. Reuters has the number at up to 16,000."

Hopefully not by email

I think Intel has more class than some other companies.

But this is still a huge number of people to get rid off. Don't they do these sort of checks all the time, on a department basis. This sound more like a simple reaction to we can't do anything better, so we will fire people. A bad solution to a problem if you ask me.

Re:Hopefully not by email

A bad solution to a problem if you ask me.

Close, but not quite. When they had less competition, they probably just threw people at problems their current staff couldn't solve. Now that there's competition, they have to cut back. The simple reaction you talk about was probably needlessly throwing people at problems in the past.

Re:Hopefully not by email

They've had competition of a serious nature for several years now at least. That (by itself) doesn't seem to justify the layoffs.

Of course not, but who said that was the only reason? Intel may have had competition from AMD for a while, but Intel are just now starting to take that seriously. Intel hung on to the P4 - against a constant AMD barrage - for a really long time. But in the past year AMD has beaten Intel to the affordable 64-bit chips, affordable dual-core chips, affordable enterprise-class server chips (opteron), and affordable preformance chips (overclockers, gamers).

I will admit that the last 4 computers I have built for myself wore a sticker that read "AMD Inside." Most recently, in Feb of this year, I constructed a PC that ran a dual core AMD Opteron processor (165). On the first boot I cranked the core speed from 1.8ghz to 2.5ghz and its been running smoothly ever since. Thats a great chip, and it only cost $2xx USD, whereas the equivalent P4 at the time was near 850-1000 USD.

I will also say that I am extremely pleased with Intel lately. The archetecture of the "Core" line of processors is really cool. They are fast, dual-core, and low power. To me, this symbolizes the first REAL response to AMD by Intel.

I have spoken to people who worked as engineers at Intel. Some of the projects were really cool, but most never made it out of the labratory. Intel is an R&D firm... they do great research. I hope the layoffs don't really affect that part of the company.

Re:Hopefully not by email

It seems like a knee-jerk reaction to me. They're losing money and they don't want to scare off the investors. Easiest way to do that is to reduce the money flowing out of the company which usually means layoffs. Less salaries gives the appearance of more profit margins

Everytime, I hear of layoffs though I always think of Office Space

Peter Gibbons: You're gonna lay off Samir and Michael?
Bob Slydell: Oh yeah, we're bring in some entry-level graduates, farm some work out to Singapore, that's the usual deal.
Bob Porter: Standard operating procedure.
Peter Gibbons: Do they know this yet?
Bob Slydell: No. No, of course not. We find it's always better to fire people on a Friday. Studies have statistically shown that there's less chance of an incident if you do it at the end of the week.

http://www.imdb.com/title/tt0151804/quotes [imdb.com]

Re:Hopefully not by email

I've never been a fan of mass layoffs, but we don't know how long this has been in the making. Hopefully Intel has audited well and doesn't end up severing it's own foot in order to escape from the trap. I feel bad for the employees, but layoffs are going to happen at a large company when things start going south. Hopefully Intel is classy and gives them enough time to find new jobs/promise to rehire if things get better.

Not knee jerk

This probably is not the simplistic knee jerk reaction that you describe. I'm sure that any of us could identify a lot of redundancy or simple non-performance in any organization of 100,000 people. If you were running an organization with redundancy and dead wood and you were faced with competition from AMD then what would you do?

They should start with the bunny suit guys

That lame dancing by the clowns in the aluminised bunny suits will not be missed. Hooray for competition, this clearly signals the end of the monopoly. Hopefully this trend will continue to the desktop OS (or more properly, Program Loading Environment with a bunch of device drivers) market.

Intel will beat down AMD

I think Intel is going to make a comeback and crush AMD. Here is why I think that: Imagine a world where Apple is pushing more boxes then Dell and all of them have an Intel Chip inside. They are only hurting right now because of the tiff they had with MS over their new 64 bit design. Developers did not like it since it had a totally different instruction set. With all the trouble with their new chips MS decided to put their full force behind AMD, and Intel suffered. It is too bad that such a large number of people are going to be out of work now :(


I am sure the top echelon of Intel will take massive pay cuts also...yea right...they will get multimillion bonuses for firing so many people.


Windows Admin Tools [intelliadmin.com]

Re:Intel will beat down AMD

Well, maybe all those qualified engineers will go on to find jobs that are more productive, and build better things for society.

Unfortunately, successful companies have a bad habit of hiring people to do new projects 'because they can'. The money is there to hire more people, so, they hire more people. The more successful the company is, the less scrutiny is applied to how likely the new proect is t result in actual new revenue for the company.

After enough of this, the company finds itself burdened with a lot of labor working on things that are not really relevant o the company's main business, which negatively impacts the company's performance, and ultimately forces a layoff.

It would be better, of course, if sucessful companies could avoid the temptation in the first place and give that money to shareholders.

Re:Intel will beat down AMD

What are you smoking -- I'd like some!

First off, Apple has between 5-6% of the total PC base in the world right now. They have a loooong way to come even close to matching ONE of IBM (Lenovo), HP, or Dell. Intel made a nice marketing coup with lining up Apple, but its no panacea of profit.

Two, yes Intel goofed on the 64 instruction set. But WinXp runs on Athlon and Pentiums, and there's very little real 64 bit computing taking place on corporate desktops even today. Intel needed to make cheaper, faster, more efficient processors -- something they've finally done with the dual-core. Both server and desktop segements will do benefit from the latest designs.

Strikes me now that Intel finally has a decent product in the marketplace again, they're cutting back on R&D since they're 'in the game' once again. When you're behind, you have to spend money to catch up. Allowing AMD to beat them for so long on price and performance had to be galling to a company the size of Intel -- someone was asleep at the switch.

I love competition, I think Intel is in for some good times now, but I doubt they'll ever be as dominant as they were in the early 90s ever again. AMD has their work cut out for them, but getting where they are today was MUCH harder than what they're facing now.

Don't start with the little guys.

Middle management is a great waste of skin. Plus they often take a fairly large salary while not generating revenue or a product.

Pile of Crap.

Disclaimer: I am an actual engineer.

Middle-management is essential to getting my job done. I don't want to have to negotiate with the tool vendors on price or licenses. I don't want to have to evaluate how well people are performing. I don't want to have to find, interview, and hire new employees. I don't want to do the department budget, set the schedule, fight to get materials on time from vendors, etc, etc. And, most importantly, I don't want to have to explain what I'm doing to upper management.

Now, some managers are definitely useless, but so are some engineers. That's not a job-level problem, that's a people problem.

Friendly tip from a competitor

1. Get with direct link interconnects, FSB is teh stupid
2. Stop making a new core every other Tuesday, m'kay?
3. 4MB of cache is nice, but it has to be hella expensive right? [*]
4. Merge with Nvidia, totally mess up the PC scene, it'll be fun :-)

[*] Don't look at the retail cost for the true margins they make [if any] on the cores. Selling at a loss or near loss is not a new tactic.

Tom

Do it back to them.

Quit Your Job Day, Sept 18th.

The goal of Quit Your Job Day is to reverse the advantage perpetuated by an elitist class who profit from your actions without making any personal investment in you as an individual. If you don't know who profits from your hard work, I assure you that they care very little about you. You are just a line on a spreadsheet and if cutting your salary would make the column balance, you're fired.

http://www.quityourjobday.com/ [quityourjobday.com]

Re:Do it back to them.

That's why there are Unions. And, as typcially happens, the Union becomes exactly what the employee hated about management - a political, bottom line driven organization used to forcefully extract concessions from the opposite side. They're just working for you instead of the other side now.

It all comes back to monkeyspace. Big corporations exceed it, and need a kick in the pants (or regulations) to return balance. That's one reason why many small businesses are not regulated, and why many don't need it (oh sure, some do...some really do) - the 50 employee limit is within a standard human monkeyspace.

This is hardly news.

They have been laying or selling off in their telecom chip business since June [lightreading.com].

They better

hope that all their employees check their email today!

This just in...

Tuesday evening, Intel lays off 10,000 employees. Wednesday 7:00am, AMD gains 10,000 new employees. And to the guy that said Intel will beat down AMD. Ya right. AMD has been gaining a lot of ground for years. They have acheived so much with so little. I have only bought AMD for the past seven years not because its AMD, but for price vs performance. I had to build three machines for a local business this week and I ended up going with AMD because of price. The performance is there, there is no doubt about it. But Intel cost more overall. Why pay more for the same performance. AMD isn't going anywhere and neither is Intel. Its called competition and its what drives the two companies forward instead of idleing and not making new products.

Is this how companies compete now?

Back in my day, we remained competitive by building a superior product at an affordable price, up-hill both ways!

/get off my lawn

Guilt

Argh! For my lab, we just bought a dozen opteron-based computers. I feel guilty.

Brilliant...

What do they think those 10% of people (i.e. lots) are gonna do? Smile, take it in the rump, and bid them good day? A bunch of them are gonna end up working for AMD, and I'm sure they'll be happy to have people with experience at Intel. Non-compete clauses don't last forever.

Re:Brilliant...

I doubt they will be laying off much if any of their chip design talent. This is probably managerial and administrative staff throughout the company (general IT, accounting, call centers, etc...) People who can't really provide a comptetive advantage to another chip maker and most like don't even have non-compete agreements.

Ah, yes...the old chestnut

"We're laying people off to be more competitive!"

By this logic, wouldn't firing *everyone* make you the most productive?

Seriously, though...it's all a show for The Street anyways. They fire a bunch of people to keep the stockholders happy, then when things looks rosy again they quietly hire up again. When was the last time you saw "[Insert big company here] hires 10,000 over last 2 quarters" plastered all over the news?

This is old news to people at Intel

I have a neighbor who works at the Intel office here in the Silicon Valley and she's known for quite a while that these were in the works. IIRC, she was talking about this back in April or May.

One thing that I've always thought about company layoff planning is that there's a difficult choice to be made over when to notify employees that a layoff is in the works. Too little notice and people feel like they're being dumped without warning, too much and you have a long period of tension and a lot of people slacking off because they know that they're headed for the unemployment line.

When I worked for a division of a major company that was planning layoffs, we all knew in June that the offices in California were going to be closed by the end of the year, and offical notice came in October. The company did something that I considered a stand-up thing: they told us who was going (in October) and gave us official permission for the rest of the year to look for work using company resources. It was cool for them to give us that much notice (though because of the slow market at the time, it was hard to find work even with such a long lead time). However, a lot of employees (including ones who really were supposed to be doing something else) spent the time building houses of cards out of their company business cards, driving remote-controlled cars around the cubes, and generally goofing off.

Again, it was a cool thing for the company to do (and I am aware that there are financial incentives for getting your employees hired off before closing an office--but I don't think those offset the cost of paying them salary for three months) but I can see that there are employers who couldn't afford to do that.

Here's hoping all the folks getting pink slips at Intel can find something else to do as quickly as they'd like.

More competitive?

I don't see why laying off people would make them more competitive against AMD. Sure, their HR department will have less work afterwards, but they're not the ones who will make Intel more competitive.
This is just to make the actions go up and make the investors richer, but it won't make them more competitive to AMD, and more attractive to customers.
My compassion will to the laid off employees, and my money will go to AMD when I'll buy a new chip.

Re:More competitive?

10,000 employees, estimate $100,000 per year total expenses per employee = 1 Billion dollars per year saved. If you can minimize the negative impact of that cut on your budget (i.e., drop money sucking programs, keep production/sales at a status quo, etc.) then you have increased your yearly net profit. Profit = competition resource. More competition resources at your disosal = more competitive.

If needed and done right, it's the way capitalism is supposed to work. If it's just a wall-street ploy and actually hurts other areas of their bottom line, well, poo on them.

Deff

1 in 10? Why, they'll be decimated!

-Grey [wellingtongrey.net]

Older Americans will be the hardest hit

Older Americans will be the hardest hit by the layoffs.
1> Americans they are more expensive
2> they are older
but some also have more knowledge than thoses that are younger or in other countries

Wonderful

Seriously, where are the good paying jobs going to come from in the next 50-100 years in the US? Assuming not everyone will come up with a brilliant idea to make them rich. Globalization isn't necessarily a bad thing but I would like to see the results of an economic simulation where an entire coutry, like say the US, wraps itself in isolationist economic and trade policies, and see what happens.

killed off the alpha group

Back in '00 or '01 Intel bought the DEC Alpha group that was a step in the right direction. But from reading the INQ it seems that most of their projects were canceled and by now most of the top Alpha architects have quit.

Well that worked well didn't it?

So let me get this right: the plan was to wait until after the stock market closed Tuesday, then announce, so people don't run around dumping stock like headless chickens?

And The Reg, Reuters and Slashdot have got it now?

I love it when a plan comes toge... oh. Ah. Well, errrmmm.... if you work for Intel, have a GREAT weekend, and if you own shares, well, you've only got some 20+ hours trading to go before the announcement, so take your time...

offshoring

This maybe purely hearsay but i've heard that some of the ppl being laid off were given an option of relocating to an offshore intel group (india/malaysia/israel) where the remuneration in US$ is much less - this way they get to keep the people in, and cut back on the budget as well. the wonders(curse?) of globalization!

Maybe just in the US, not in Costa Rica

I have been to this job fair out of curiosity a month ago, and intel was one of the biggest recruiters there, looking the most professional, with trained HR personnel making quick stand-up interviews.....

Intel, as far as I know is not laying anyone off here, in fact they are hiring as crazy.

but also consider this : with an IT degree as an engineer you make $1500-2000 as a starter at a big firm (most leikely below that), while a CS representative's salary is around $800-1200 or less at most places...

This is monthly, before you wonder and yes, you make an OK living on that.

Now the article probably should have said: Intel joins the other us companies, who want to hire well-educated foreigners, 4 for the price of 1.

Maybe not that off-topic: I think CR and Panama is getting popular because of the physical distance to the US. I mean try to fly to India to manage your company, or give training, a few time a month.

just my observaion.....

OHH btw: I just heard, that many ar criticising Intel, because they are responsible for water levels being 20% lower than usual, and it seems that the government does not care. But that is just people talknig, I am not claiming any of these to be true......

Intel always does this in the worst way

I know more than one person who was laid off from Intel. Worst one: A friend was on business in Hong Kong, with one other employee. They were fired *while* in Hong Kong. The company actually tried to not pay their return travel (!)
This turns out to be legal (!)

I know some former Intel employees who were set to work on a project, and unknown to them, the project managers *also* put another team on the same project, and when they were determined to be making better progress, the whole other team was canned.

There's a whole culture at that company of aggressive, cutthroat competition among the business units. Basically, the theme is "screw your neighbor."

Intel: formerly great, now the US Steel of Tech

This is, as others have observed, long overdue. When Intel could maintain a dominant market share, and thus pricing power over its competition (primarily AMD), it could afford to be (or try to be) a broad-based technology company: i.e. one that invested heavily in new technologies and speculative businesses that were not necessarily on a direct path to their primary (semiconductor) products. The largest (and most wasteful) of these investments happened during Craig Barrett's regime as CEO, and it was these that were most desperate and ill-advised. These included Intel's $500m+ investment in trying to be a hosting service, its attempts to be a low-cost end-user peripheral maker, a toy manufacturer, a maker of LCoS-TV chips, and numerous other misbegotten adventures far from its core competence.

What Intel is at heart, and will be for some time, is the world's best high-volume manufacturer of semiconductors, something that requires a far, far lower load of white-collar workers than being a broad-ranging technology company. Intel will continue to be a great producer of an important product, but only in the sense that (e.g.) US Steel was once a great producer of an important product. Intel is on the path to irrelevance as a technology force. This is why its P/E is 17x and not, for example, Google's 55x or even Microsoft's 21x. Look for it to trend upward in the short-term, but in the longer term settle toward US Steel's 8x.

Also note that recent management changes have elevated Sean Maloney into an heir-apparent position. This signals the fin de siecle, completing the transition from an engineer/scientist leader (Andy Grove) through a manufacturing guru (Barrett), to a bean-counter (Otellini), ending with a salesman (Maloney). How the mighty have fallen.

Intel/Micosoft plants in Israel bad for America

I'm sure its only a matter of time before the US taxpayers are told they need to send more money to Israel because these overseas operations in a semi-war zone are so vital to the USA. The only thing 'vital' going on in these Israeli operations would be inserting various 'back doors' that would be illegal, or at least able to be questioned in court, in the USA or other industialized, semi-transperant nation.

Just like old times

This used to happen all the time back in the good old days. Now that industry is beginning to equilibrate after the bust, the cycles are shortening and it's back to the good old days of semiannual semiconductor boom-bust cycles.

Intel used to have every manager rank their employees in order, "on a curve" so to speak. This was done [quarterly, annually?] and was IMHO a fair way to force managers to evaluate their people objectively, which every manager ought to do anyway. I suppose one side beneft is that there was always a list at hand when it was time to sack N% of the workforce.

Crud

The heartless cruelty of the bottom line No loyalty to families No honor for spent time No gold watch goodbyes All to save a dime Send them away empty and close the factories down No suits need to worry No American dreams rise Your jobs moved to Asia So that you can sell fries

You've been fired...

So are they going to pull a radio shack?

Oh, such smart businesses

"As a technology company, we've been losing our technical edge in the last two years. Whatever shall we do?"
"I know--let's fire people until we're profitable again!!!"

Look at who they're firing--the marketers. From the article, "Intel studies comparing its own staffing levels to competitors' concluded that the ratio of marketing personnel to salespeople was too large, the sources said."

I'm not saying that eliminating marketing people isn't the right thing to do, but what an assinine metric--the ratio of marketing to sales. At a certain size, do all companies forget that creating better products is often a good way of making sales?

Who would have thought, part 17

http://www.theinquirer.net/default.aspx?article=31 660 [theinquirer.net]

OK, this is getting old, but lets put out a few more details than are floating. Sales and marketing are getting gutted, a bitch slap to Eric Kim, should he be employed wednesday. Indian operations are getting hit, as are Intel Capital, Oregon (bits) and a few other sites.

The numbers that are floating are 15K (including cuts already done), 30K and 35K. The latter two seem to be layoffs plus people gone from divisional sales and closing, so all the numbers could be correct.

If you work for Intel, take heart in the word that is reaching me that they are really getting the right people, not those who do a good job. This isn't mass cuts for the sake of mass cuts, but it is a lot more targeted than you might suspect.

                -Charlie

Getting rid of people to stay competitive?, etc

Throwing away one of your main assets, i.e. people, just doesn't seem to work.

Less people = less ideas and less work = less productivity and innovation = less competitive.

Intel has been on a bad path since abandoning faster CPUs. 4 GHz will always be faster than 2 CPUs at 2 GHz except for 100% paralizable problems (which are rare, and programming to take advantage of that is a real pain for the programmer and/or compiler writer - C is weak in this area).

I still like them better than AMD, because of compatibility and thermal issues (shutting down is better than burning up).

I think its Time to Rethink Intel's Position

I have had a major problem recently with Intel. I can hardly believe it. I purchased two SC1420 Xeon servers from Dell to run Windows XP Professional 64-bit and Windows Server 2003 R2 64-bit. I am a software engineer and I know that different revs of the CPU chips have different features. I of course wanted to know exactly which CPU chips were in my machines. I think its only right that I should be able to find this out. I started with the Intel CPUID program which told me the Family, Stepping, and Revision numbers for the CPUs. That's where the trouble started. The CPUFinder web page at the Intel site has no reference for the stepping and revision repored by the CPUID utility. I emailed Intel technical support ten times with the CPUID numbers asking for clarification. Intel finally called me back and told me I should remove the CPU fan assembly and remove the thermal transfer material and read the sSpec number off the CPU chip. I didn't want to void my Dell service agreement, so I started asking Dell to tell me the sSpec number of the CPU chips that they ship in the SC1420 server systems. My sales person dumped me back to the Special Support Services desk who never returned any of my calls. I called Intel back, and they stated that it is up to the vendor whether they want to disclose what chip they are using in a system. I am royally pissed off at Intel and Dell and don't plan on buying either of their products any time soon. The whole situation in so unprofessional I can't stand it. The moral of this story is that Intel has so many versions of the Xeon chip that they cannot keep them straight, even on their technical support web site. I have always had the highest respect for Intel in the past and have used their chips since the 8085. But not any more. If they are going to lay of a major percentage of their employees, it can't happen soon enough to suit me. To bad they aren't going to start from the top down.

Not enough CS ... CEEs ...

No doubt after laying of 10% of their workforce, Intel will continue to lament the lack of "qualified" CS and CEE candidates that have 10 years of experience in technologies that are 3 years old.

Re:Intel's lose is another's gain?

Sure they're not going to fire they're really good workers

Actually, that may not be a good assumption. Often in engineering industries the more experienced workers are the first to be laid off. A company can hire two or three bright-eyed bushy tailed college grads for the price of one engineer with 20 years experience.