Facing a continuing decline in market share, along with a 22 percent drop in share price this year, Intel Corp. Chief Executive Officer Paul Otellini is looking for ways to cut $1 billion in costs.
He already got rid of 1,000 managers in July to bring the company back to profitable growth. That, and the recent announcement of the sale of two of their communications units, which will result in 2,000 less workers on their payroll, isn't seen as anywhere near enough as the company has lost sales for the first time in five years, and continuing market share to chief competitor Advanced Micro Devices Inc., which now has over 20% of the market.
Profits have also dipped as it is the lowest it's been in four years and analysts are saying that they won't meet the projected 2006 sales forecast.
Referring to the amount of jobs needed to be cut, David Wu, an analyst at Global Crown Capital said, "It would be seen as lame if Intel does less than 10,000."
"You're probably going to see them go back to the core business, the company they were three or four years ago," added Chris Caso, an analyst at Friedman Billings Ramsey & Co.
In an interview today, Patrick Ward, a spokesman for Intel, referred to the potential job cuts as "speculation." Of course all that means is that there hasn't been any official announcement. Not that the "speculation" is out there, it will force Intel to communicate what its intentions are.
The decline in sales and market share has already pushed Intel to release a version of its Xeon server chip five months ahead of schedule to they can fight to get back some of the sales and market share they've lost.
Other sources of the story:
Sponsored link: The outsourcing every manager requires - Tampa Locksmith
Comment Preview