Intel CEO warns that deepest recession “in his lifetime” will only get worse
07 Nov 2008
Another senior executive has added his voice to the concern surrounding the slowdown in the global economy in general, and the US in particular. During an interview at a technology conference in San Francisco on Thursday, Intel CEO Paul Otellini reportedly told the audience that the US is in a recession that will last for two to three quarters, and that the slowdown will spread to other regions of the world.
He was speaking at the same Web 2.0 event where Yahoo CEO Jerry Yang had earlier proffered the idea of Microsoft taking over his beleaguered company, almost a year after he himself had rejected such advances. (See: Cornered Yahoo CEO Jerry Yang looks to Microsoft for succour)
In an attempt to inject humour into the situation, Otellini joked that attending the conference was "a respite from watching the stock market crash every day." However, there was no mistaking the concern in his voice.
The recession will get worse, he warned. ''This is the deepest one I've seen in my lifetime. All the smart people that I talk to tell us the US is in for a two-to-three quarter recession,'' he said. ''We'll see much larger unemployment a year from now.''
In its weekly report, the US Labour Department said new claims for unemployment dropped slightly to a seasonally adjusted 481,000 for the week ending 1 November. But every day more job cuts are announced.
In the past week alone, big tech companies like Cisco, Electronic Arts, Motorola, and Xerox have announced layoffs or hiring freezes. On Wednesday, Intel's rival Advanced Micro Devices said that it would lay off 500 employees, or 3 per cent of its workforce, as it seeks to lower operating expenses and return the company to profitability.
Otellini stressed that tech companies need to stay focused on a post-recession strategy. ''We have to not think about today's market turbulence but what can happen as we get through this and what kind of products we can develop around the web as we break out of this cycle,'' he said.