Intel cuts 3,000 jobs as weak demand hits chips

Intel cuts 3,000 jobs as weak demand hits chips
No redundancies planned for UK, but positions will be lost through natural wastage; Intel confident of better second half, backed up by market researcher Dataquest. By Roy Rubenstein Intel will cut 3,000 jobs – five per cent of its workforce – over the next six months. The job losses will be predominantly through ‘attrition’ but redundancies ‘at a few local sites’ will also occur. “There will be no redundancies in the UK although positions will be lost through natural wastage,” said an Intel spokeswoman. Chris Hogg, marketing development manager for north Europe, put the job losses down to market conditions. “We have to cut our cloth as the market dictates.” The announcement came as the company reported first quarter profits 36 per cent lower than the same period last year. First quarter sales were $6bn, down seven per cent from the previous quarter, while profits were $1.3bn, down 27 per cent. Intel cited weaker than anticipated demand for its processors as the cause. “Large OEMs purchased less in this first quarter, as did end purchasers [PC buyers],” said Hogg. Moreover, he expects that Intel’s second quarter figures will be flat at best. However, the company is optimistic about second half year sales, even if total sales for 1998 are below what it first predicted. This view is shared by market research firm Dataquest. It predicts sales of x86 processor based desktop PCs will grow by 16 per cent this year, down on last year’s 27 per cent growth. The results coincided with what Intel described as its biggest launch of the year: the debut of Celeron – Intel’s 266MHz low end processor for ‘basic PCs’, 350MHz and 400MHz Pentium II processors, and its 440BX AGPset chipset which is the first to support the 100MHz system bus and the PC-100 compliant synchronous DRAMs.


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