Intel chief executive Brian Krzanich, in a memo circulated to employees on Tuesday, confirmed the firm’s layoff plans, which have been in the news for a while now, says a report from Oregon Live. This marks the first time the chipmaker has come clear on how many people it is looking to layoff.
Intel explains the reasons for layoff
Krzanich said “Yes, we are implementing headcount reductions,” and the total layoffs are not exceeding a few hundred employees at any site, stating that the total headcount will not probably change this year. So, for the first time, the chipmaker has finally come clear on how many people it is planning to layoff.
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In the memo, Krzanich noted that companies are currently in dire need of flexibility to invest in the skills and experience needed for new growth areas in the wake of rapid innovation and change. He said that these layoffs may be from segments that are losing their relevance to the company. Other layoff may be related to scrapped activities and inefficiencies. Additionally, the cuts could also relate performance management, with a focus on removing lower job performers. Krzanich said that right now Intel is implementing a mix of all three of these.
Initially, the company was expecting that its 2015 sales would increase 5% from the record revenue last year, but softening PC sales in the first-quarter pushed the chip maker to revise its outlook downward. Compared to the previous guidance, Intel is now expecting a “flat” year. In April, it announced a reduction of $300 million in research and administrative costs.
Krzanich disappointed with leaks
In the memo, Krzanich also mentioned his disappointment over the leak of internal documents, saying the “most important people we need to communicate with are those affected by these actions,” and “’leaks’ of internal documents disappoint me so deeply.”
By acknowledging the layoffs, Intel has changed gears since an internal memo to the managers, according to The Oregonian/OregonLive. In the earlier internal memo, it was mentioned that the chip maker will not announce the layoffs it is planning to implement internally or externally. However, after the news started floating around in the media about the job cuts, Krzanich said that he felt obliged to respond.
“One thing I have always promised is to be open and transparent, and to treat employees and partners with respect and integrity,” he wrote.