Intel Says New Cuts May Come From Attrition

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 Logo“This is part of aligning our resources with the needs of the business,” says Chris Kraeuter, an Intel spokesman. He declined to elaborate which business units or locations will be affected.

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.

2 Responses to “Intel Says New Cuts May Come From Attrition”

  1. Outsourced Sam

    This makes sense. After all our beloved (D) Senate has constantly reminded us that American IT workers are way underskilled compared to the cheap 100,000 H1Bs they have lined up for their corporate buddies.

    • bluemountain184

      OS, aren’t Republicans more of a fan of H-1B visas than Democrats?
      After all, Republicans serve the interest of the Top 1% so nakedly, and Top 1% wants to pay their employees legally less.
      Of course, many “New” Democrats like Bill Clinton and Barack Obama (Obama may not identify as a “New” Democrat, but seems to believe in similar policies.) seem to agree on the H-1B issues.
      Personally, I don’t agree with “New” Democrats on many policy grounds, especially importing cheap foreign labor since I see a lot of it here in Silicon Valley.