Intel to slash 10,500 jobs

Intel has announced that it would cut more than a tenth of its workforce as part of a drive to become more efficient in the face of competition in the computer chip market.

The world's leading computer chip maker had a payroll of 99,000 people worldwide prior to the much-anticipated announcement that it would lay off approximately 10,500 workers.

"These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come," said Paul Otellini yesterday, Intel president and chief executive officer.

Intel has said that it's number of employees would decline to 95,000 by the end of this year as a result of workforce reductions, attrition and previously announced layoffs.

By mid-2007, the Intel workforce would drop to about 92,000 employees, 10,500 fewer than the company's employee population at the end of the second quarter of 2006.

The chip maker also planned to cut costs for merchandising, capital and materials, according to Intel spokesman Mark Pettinger.

As a result of the restructuring, the company expects to generate savings in costs and operating expenses of approximately two billion dollars in 2007. In 2008 the company expects savings from this restructuring to grow to approximately three billion dollars annually.

In July Intel announced a management shake-up on the heels of a lackluster earnings report and the laying off of 1,000 managers at its facilities worldwide.