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|NewsletterIntel has disclosed to employees that it will cut 1,000 management jobs across the company as one of the first actions coming out of its efficiency review first announced in April, a company spokesman has confirmed.
The cuts will be through all levels of management, all business units and all geographies. Intel did not disclose any cost savings, but said that those cost savings would already be incorporated into the earnings guidance for Q3 that Intel will release next week.
“The action is designed to reduce costs and improve decision making and communications throughout the company,” the spokesman said. “Over the last five years the number of managers has grown faster than the overall employee population. The analysis showed that there were too many layers between front line managers and senior managers”
Intel’s efficiency analysis is ongoing, and these job cuts will not be the final action, the spokesman said. Subsequent actions are likely to come in Q3 and beyond.
Intel confirmed the job cuts after the close of the market on Thursday.
Affected employees will be notified over the next two to three working days and Intel expects the cuts to be completed by the end of the month.
At the end of Q1, Intel had 103,000 employees. However, that number is likely to be lower for the end of Q2 due to a hiring freeze. The Q2 number will be reported during the company’s earnings call next week.
Intel first announced the efficiency review at the end of April and CEO Paul Otellini promised the review would be the most extensive the company had conducted since the 1980s when it transformed itself from a memory company into a processor company. He said that every business unit would be analyzed as part of the review.
Intel also recently sold its XScale business to Marvell -- another action stemming from the efficiency review.