Intel is planning to cut approximately 5,380 workers from its payroll this year, representing a 5 percent workforce reduction. The move comes as the company faces fallout from slowing PC sales and efforts to gain traction with tablets and low-power chips that have yet to take off.
Intel typically faces an annual workforce attrition rate of about 4 percent worldwide, Kraeuter says. He expects that the reductions will be made through attrition, retirements and personal decisions not to accept redeployment. At the same time, he declined to speculate on whether layoffs might eventually be necessary.
The plans to cut its workforce came to light after Intel reported its fourth quarter earnings last week. Total 2013 revenues of $52.7 billion were down 1 percent from the previous year. Its net income, $9.6 billion, represented a drop of 13 percent. But perhaps more telling regarding the workforce reduction is its forecast that revenues will be flat this year.
In some ways, Intel’s decision to trim its workforce isn’t surprising. Last June, the chip-maker lowered its revenue forecast for the year and said that while it wasn’t planning layoffs, it would slow its hiring. In June last year, Intel had a total of 106,000 workers worldwide. It ended 2013 with 107,600 employees.
Of course, Intel isn’t alone in its efforts to slash its workforce. Hewlett-Packard is cutting 34,000 workers as part of a multi-year restructuring plan. Meanwhile, Cisco initiated a 5 percent cut last year, affecting 4,000 workers, as a means to get expenses in line with revenues.