Digital Journal — Competition is a hallmark of capitalism, but it also can force early retirement on unsuspecting staff. When the going gets tough, the jobs can sometimes get going.
Intel’s fierce competition with rival AMD is forcing the chip-maker to cut 10,000 employees this week, or 10 per cent of its staff, according to Financial Times. This “cost-cutting plan” is an attempt to restructure the company and improve areas of inefficiencies in light of its battle with AMD.
Poorly performing areas include the flash memory segment, which accumulated an operating loss of $800 million US in the second quarter. Compare that figure to Intel’s $1.9 billion profit from its core PC and server microprocessor units, and it’s fair to say the company has some serious restructuring ahead.
The looming job cuts shouldn’t shock any close observer of recent Intel moves. Earlier in the month, Intel sold its media and signalling business, and in July it cut 1,000 management jobs and reassigned five top executives to new positions.
What’s next, downsizing headquarters to a four-bedroom apartment?
How Intel will succeed in 2007 remains to be seen, but their internal overhaul signals an about-turn for the market leader.
Not content with lazing around at the top spot, Intel wants to make sure its rivals know it means business — even if that means shuttling its employees to the welfare line. Intel might not care about retaining staff for the long term, but it certainly is concerned about keeping their chip-making machine lean and tight. No matter who gets caught in the chopping block.
