Analyst: Intel to put off
Israel investments
Intel is expected to announce up to 20,000 lay-offs on Tuesday,
including hundreds in Israel.
Doron Avigad and Yuval Mendelson 3 Sep 06 16:43
Following weekend reports in the technology press claim that Intel
Corp. (Nasdaq:INTC) will fire 10-20% of it
workforce, amounting to 15,000-20,000
people, the ramifications of the news on Israel is now
becoming apparent. The company is likely to fire hundreds of its
6,500 employees in Israel, and it may not stop there.
Raymond James Equity Capital Markets analyst Ashok Kumar believes
that Intel will defer planned investments in new fabs, including
those in Arizona and Kiryat Gat. Intel is due to complete
construction of the Kiryat Gat fab by mid-2008. It is still unclear
whether the company will still hire employees for the fab, which
was the main reason for the governments hundreds of millions of
dollars in set-up grants to the company, in view of the cutbacks
and lay-offs.
The cutbacks at Intel follow the serious deterioration in the
companys financial results and the competition against Advanced
Micro Devices Inc. (NYSE:AMD) in the semiconductor market. Intels
second quarter profit plummeted 57%, compared with the
corresponding quarter of 2005, to $885 million, and its revenue
fell 135 to $8 billion.
An announcement about the current wave of lay-offs is expected this
week, probably after trading closes on Wall Street on Tuesday. (The
US markets are closed tomorrow for Labor Day).
