In an attempt to become more competitive and to cut down the costs, Intel will fire about 10,000 employees.
This move was announced by Intel’s CEO Paul Otellini and comes after a series of ups and downs for Intel. In April Intel started an internal analysis to find ways to become more competitive and to increase its efficiency. The announcement will be made by Otelinni Tuesday after the stock market will close.
The 10,000 people that will be fired represent about 10% of the total employees that Intel has worldwide. It seems that most of the employees that will be fires are hired in the marketing department. It seems that Intel found out that that are too many marketing personnel reported to products.
Intel did not comment on the layoff plan but it is expected that the investors won’t be so happy because no layoff is considered except it leads to increases in revenues. This happened too when Intel decided to lay off 1000 managers.
This move comes after Intel sold two of its business to other companies. In June, Intel sold its Xscale communications and applications chip business to Marvell while in August it sold its media and signaling division to Eicon Networks.
All this because AMD is now a thorn in Intel’s back. If until three years AMD was a small competitor, now AMD has 26% of the server market and sells CPU to all four major server makers, not to mention that it managed to convince Dell to use AMD processors into their desktops and notebooks which lowered the CPU’s that Dell will buy from Intel which was an exclusive partner until several months.
All this represented a very bad selling period for Intel which reported a 57% drop regarding net income and 13% drop regarding revenues.
Perhaps this move and the release of Core 2 Duo processors with all its variants for notebooks and servers will save Intel from a fall.