 "India unlikely to be spared in Intel restructuring")
As Intel begins to eliminate around 12,000 jobs globally, close to 11 per cent of its total workforce, the chip maker’s operations in India may also take a hit. However, the impact on India might not be felt immediately.
India is one of the important research and development (R&D) sites for Intel globally, with more than 70 per cent of its local workforce — around 7,000, including McAfee — engaged in research.
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While the employees in India have been communicated about the global job cuts, site-specific impact is still not clear. Intel is known as one of the most employee-friendly technology companies across the world.
“We are not providing site-specific information at this time, and we are still evaluating our plans,” an Intel India spokesperson said in an email response to Business Standard query. “Overall, however, we expect that these actions will result in a reduction of up to 12,000 positions globally by mid-2017 through site consolidations, a combination of voluntary and involuntary departures, re-evaluation of projects, and an increased focus on efficiency in a variety of programmes.”
Staff layoff is a pre-emptive measure by Intel as the personal computer (PC) market is in declining globally. The California-headquartered company derives more than half of its revenue by providing chipsets for PCs. According to Gartner, the worldwide PC shipment declined by 9.6 per cent in first quarter of 2016 to 64.8 million units with all major regions showing year-on-year decline.
“Intel is challenged because of the sharp decline in the PC shipments and that’s why they are having to restructure. This, among other things, includes layoffs,” said Jaideep Mehta, managing director, IDC India and South Asia.
Intel has not been able to crack the mobile chipset market which is dominated by players like Qualcomm and Taiwanese chipmaker Mediatek. Further, giants like Samsung, Apple and Huawei are turning to in-house chip designs, reducing the market prospects for Intel.
Intel started its India R&D unit more than 15 years ago while server and client development works commenced here around a decade ago. Then, slowly, the company added all-in-ones, tablets, phones, IoT and the wearables in its ambit of R&D activities.
Industry experts, however, believe that while the company’s business prospects for the upcoming Internet of Things (IoT) wave look good, the sector is still not large enough to bail out the troubled company. Another IoT challenge will be making high volume, low processing power and low-cost chips.
While announcing the restructuring, Intel has said the move is to accelerate its evolution from a PC company to focus more on cloud and upcoming IoT wave. “The data centre and IoT businesses are Intel’s primary growth engines, with memory and field programmable gate arrays (FPGAs) accelerating these opportunities – fuelling a virtuous cycle of growth,” the company said.
CHIPPING OFF
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Intel has 7,000 employees in India including in McAfee India
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70% of them are into R&D
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India unit is focused on R&D for servers, PCs, tablets, etc
- More than half of revenues comes from PC chipsets
