Intel to cut 5,000 jobs in 2014
18 Jan 2014
Computer chip giant Intel Corp is set to slash its global workforce by around 5 per cent this year in order to boost its earnings as revenue and profit fell for the second consecutive year, a company spokesman said yesterday.
"This is part of realigning our human resources to meet business needs," spokesman Chris Kraeuter told Reuters.
Of its total global workforce of 107,000, around 5,350 workers are expected to be affected by the move which comes just a day after the company reported its fourth-quarter and full-year earnings.
The downsizing may include early retirement, attrition and other options, the spokesman said.
During a conference call Thursday to discuss the earnings, Intel's chief financial officer Stacy Smith disclosed that the company would be "bringing down employment in 2014", although further details have not been disclosed.
"We have a long history of redeployment of resources, and we will be making significant new investments in data center, and tablets and low-power systems and the internet of things," Smith said.
The company has seen sluggish sales growth in recent quarters due to falling computer sales as more and more consumers have flocked to devices such as smartphones and tablets.
Although Intel leads the computer chip industry, it has been slow in turning out chips for smartphones and tablets, a market dominated by US rival Qualcomm and South Korea's Samsung Electronics.
Intel is not the only technology major that made significant reduction in workforce due to slowing demand for PCs. Computer giant Hewlett-Packard is also undergoing a large round of job cuts, which is expected to reach 34,000 up to October 2014, all in a span of a little more than two years.
Earlier this week, Intel has put off opening a newly built $5-billion factory in Chandler, Arizona designed to produce its most advanced chips, for the foreseeable future.
Intel's 2013 revenue was down 1 per cent at $52.7 billion while net income fell 13 per cent to $9.6 billion compared to a year ago. PC client group revenue dropped 4 per cent while data centre group revenue increased 7 per cent.
The company's 2014 outlook is tepid with revenue expected to be approximately flat.
Commenting on the earnings, Intel CEO Brian Krzanich said, "We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms. For example, at CES, we demonstrated multiple devices that weren't on our roadmap six months ago."
The company plans capital expenditure of around $11 billion in 2014, with special focus on areas like data centre, low-power chips and tablets. It plans to quadruple tablet chip volumes this year to 40 million units and also enter aggressively into the mobile chip market.
