Intel is reportedly looking to lay off employees by the end of this month in the wake of unsatisfactory sales. An internal memo obtained by Oregon Live suggests that the chip maker is looking to keep its expenses flat to bring it in line with its reduced revenue outlook for 2015. Intel, according to the Oregonian, is planning to bring down its research and administrative budget by $300 million this year.
Not many details available
Intel managers wrote in the memo, “This means that we’ll prioritize investments, slow down hiring, and drive other efficiencies, including a performance-based involuntary separation package.” There were no details in the memo about who will lose their jobs, but it informed employees that on June 15, the drive of downsizing manpower will begin and conclude a month later.
Intel’s memo suggests that the chip maker has identified employees who will lose their jobs but not yet informed them. Employee reduction will vary with each business group according to the memo. The memo mentioned that the process for deciding on the employees who will lose their jobs started in April, just a couple of weeks after the chip maker posted its first quarter results and announced spending cuts for the year.
Intel is planning to contain spending in part by laying off employees and also through spending cuts. The company needs to bring down its total expenses for the second half of the year, according to the memo.
Intel important for Oregon’s economy
On one hand, where Intel is making efforts to cut expenses, on the other, it is spending $16.7 billion to take over programmable chip maker Altera.
Intel declined to discuss this, and Chuck Mulloy, a spokesperson at Intel’s headquarters in Santa Clara, told Oregon Live, “We will not comment on internal, confidential communications that are not intended for public consumption.”
Intel has approximately 106,000 employees around the world, including 17,500 in Washington County, Oregon. There is no other business of that size in the state. The number of employees Intel has in Oregon is near the all-time high, but total employment has been volatile in recent years, dropping sharply when sales drop and rising unevenly when business is up, says the report.
On Thursday, Intel shares closed down 1.28% at $32.31, and year to date, the stock is down by over 12%.