* Company boosts focus on fast-growing areas
* Job reductions to include attrition, other options
By Noel Randewich
SAN FRANCISCO, Jan 17 Intel Corp plans
to reduce its global workforce of 107,000 by about 5 percent
this year as the chipmaker, struggling with falling
personal-computer sales, shifts focus to faster-growing areas, a
company spokesman said on Friday.
The announcement, equivalent to over 5,000 positions, comes
a day after Intel posted a fourth-quarter earnings report that
did little to dispel concerns about a slowing PC industry.
"This is part of aligning our human resources to meet
business needs," spokesman Chris Kraeuter said.
The job reductions may include retirements, voluntary
programs and other options, Kraeuter said, adding that Intel's
typical annual attrition worldwide is about 4 percent.
He declined to say whether details of the changes had been
On a conference call with analysts on Thursday after the
earnings release, Chief Financial Officer Stacy Smith alluded to
a reduction in employment this year and said that Intel would
increase investments in areas such as data center technology,
low-power chips and tablets.
Intel dominates the PC chip industry, but it has been slow
to adapt its processors for smartphones and tablets, markets now
dominated by rivals such as Qualcomm Inc and Samsung
Electronics Co Ltd.
"If they've got a bunch or resources in a market that may
not be dead but is not growing a ton, it probably makes sense to
reprioritize those investments in areas where there are
fast-growing markets," said Bernstein analyst Stacy Rasgon.
Intel has both added and shed significant numbers of jobs
over the past decade. Struggling to fend off a challenge by
smaller rival Advanced Micro Devices Inc in 2006, Intel
announced it would reduce its workforce by over 10,000
positions, but its overall number of employees has grown since
The chipmaker is also not the only tech company to trim its
workforce because of slowing demand for PCs since Apple's
iPad started to cut into demand for laptops in 2010.
Hewlett-Packard Co is in the midst of a years-long
internal restructuring that would ultimately see it shed 34,000
jobs, or 11 percent of its workforce, through fiscal 2014.
Dell succeeded last year in taking itself off public
markets, allowing CEO and founder Michael Dell to restructure
away from Wall Street's scrutiny. That overhaul is expected to
Earlier this week, Intel said a newly built factory in
Chandler, Arizona, originally slated as a $5 billion project
that in late 2013 would start producing Intel's most advanced
chips, would remain closed for the foreseeable future while
other factories at the same site are upgraded.
In its report on Thursday, Intel forecast March-quarter
restructuring charges of $200 million, a portion of which could
be earmarked for severance pay.
Last September, Intel said it would close an old factory in
Massachusetts, eliminating about 700 jobs.
Intel has said it plans to quadruple tablet chip volume this
year to 40 million units and aggressively stake out market share
ahead of future mobile chip launches. Essentially buying its way
into tablets, Intel plans to subsidize its customers'
engineering and manufacturing expenses, effectively reducing its
gross margins in 2014 by 1.5 percentage points.
Shares of Intel closed 2.6 percent lower at $25.85 on the
Nasdaq on Friday. They earlier traded down as low as $25.25.