Search is on for missing Intel managers
Analysis 99,900 employees and
counting down
By Mike Magee: Sunday 16 July 2006, 11:36
INTEL'S DECISION to make 1,000 managers redundant could well be the
right thing to do, but it begs questions about which managers have
gone from which divisions, and whether further cuts will
follow.
CEO Paul Otellini's memo to all Intel staff last week said senior
and first line managers were affected by the decision. Intel took
the decision because of "slow and ineffective decision making"
caused by too many management layers.
Intel's head count, according to its own web site, is 99,900 over
199 worldwide offices and facilities. Intel here, is not... "a very
hierarchical company so a formalized organizational structure is
not a particularly good representation of how the company
works"..
Only a few years ago, Intel's head count stood at far less than
this staggering 99,900 figure . AMD's headcount, in contrast, is
around 13,000 plus. If you've several factories, a large headcount
is somewhat inevitable - the logistics and manpower involved in
operating top end fabrication plants is far from trivial.
Otellini said in his memo that the manager move is only one of the
first to come out of its 90 day reviews and said the number of managers has grown faster than its
overall employee growth. However, as some readers who work
for Intel have pointed out to us, while
too many managers may spoil efficient communications that may be
because, ironically, there's too much communication.
One said: "The cuts were supposed to chop out bad decision making,
but what they really are is a sop to Wall Street to prop up the
stock price. I know of two very senior people who were let go who
were both very influential in the company and well respected. Both
of these guys had one thing in common: They took risks and called
out senior management to make changes."
When the efficiency guys come calling in a corporation, the
reaction of many middle managers is to frantically cover their own
butts, but in doing that, people stand the risk of running straight
into lamp posts. Managers may not want to tell their managers about
problems because they fear they'll catch the flak. And telling the
Emperor the truth about what's happening may just be too tough to
do.
As Otellini has already said that
the 1,000 manager cut was only the first of other major moves, we
wouldn't be surprised if another 10,000 jobs are on the
line. In the Roman army, out of every 10 soldiers,
one was executed. That process was called Decimation.
The disposal of Intel's comms division to Marvell the other week
was one of the moves associated with the review. Otellini, in his
memo, hasn't ruled out other such deals. One candidate for wax
could be its flash division - AMD's decision to spin off its flash
unit as Spansion looks like it's paid off for Hector Ruiz.
Historically, Intel has preferred to redeploy or not employ people
when the going got tough in the past. But that 99,900 figure does
seem disproprotionately high. We're sorry when any jobs go at any
IT companies because we all kind of swim in the same pond. But the
shareholders have already demanded stiff and stern action to
restore Intel's share price to its former glory. We've met Otellini
many times over the last 15 to 16 years - he's a no-nonsense guy
who undoubtedly is capable of making and taking tough
decisions.
The firm releases its quarterly results later this week and as
we've pointed out previously, for its next generation processors to
start clocking up significant revenues will surely take more than
one quarter - it hasn't yet formally announced its Merom family of
notebook processors. ยต
