Intel takes axe to 1,000 managers
worldwide
By INQUIRER staff: Thursday 13 July 2006, 19:08
INTEL CONFIRMED an earlier INQ story saying 1,000 plus jobs would
be cut at the company, but the redundancies are only for managerial
positions, the firm said.
The firm reports its quarterly earnings next week, and declined to
say whether more jobs were on the line.
A senior representative at Intel told the INQ that the firm
informed its employees of the reduction in 1,000 managers worldwide
this morning. "Only managers are affected by this action," he
said.
The move is part of CEO Paul Otellini's review, which is expected
to be complete by the end of July, as we noted before. The
representative said that the action was part of the restructuring
Intel announced it would make in April.
It doesn't take a genius to figure out that if Intel is making
managers redundant, other, lower echelons, will be affected too.
The representative would not comment on that, but said an
announcement about today's changes would be made at its quarterly
earnings call next week.
AMD has yet to declare what it's going to do about its Geode folk.
µ
To: All Intel employees
This week were taking an important and difficult step in our
efficiency project: reducing the number of Intel managers by about
1,000 people worldwide. Only managers, ranging from senior to
first-line, are affected. This step is important because it
addresses a key problem weve found in our efficiency analysisslow
and ineffective decision-making, resulting, in part, from too many
management layers. It is difficult because the managers who will
leave the company are our colleagues and friends, and since we have
limited internal job opportunities, redeploying their skills is not
a viable option.
We are notifying the majority of impacted employees on Thursday and
Friday this week, and (except where a countrys laws require
different steps and timelines) we plan to have all affected
employees informed by Monday, July 17. In the U.S., most employees
last day of work will be July 28, and their benefits will include a
minimum of about three months separation pay (and more for lengths
of service over two years). In other regions the process and
benefits will differ. While we cant eliminate the impact to these
employees, were committed to offering them support during this
difficult time.
This manager reduction is one of the first major actions coming out
of our structure and efficiency project, and I believe its an
essential first step toward making us more competitive. Over the
last five years at Intel, the number of managers has grown faster
than our overall employee population. Our efficiency analysis and
industry benchmarking have shown that we have too many management
layers, top to bottom, to be effective.
In addition, this finding is consistent with what our
organizational health surveys have suggested: that the relative
increase in management has impaired decision-making and
communication, reducing the companys efficiency and productivity.
Many of you have made the same point in your individual inputs to
the efficiency team.
As Ive said in previous Webcasts, one of the outcomes of the
structure and efficiency project is that well be a leaner and more
agile company. Well make quicker decisions, collaborate better
across the company, and enable a cost structure that allows us to
continue to win in our extremely competitive industry as it
evolves.
This manager action is one step along that path. Another was the
decision to sell our communications and applications processor
business to Marvell. Well continue to identify other
opportunities, act on each one as soon as we can, and tell you
about the changes as soon as possible. Ill talk more about this
and our business priorities in my employee Webcast on July 19 at 4
p.m. Pacific time.
In April I said that we had decided not to do an immediate across
the board layoff, because that would be reactionary focused only
on the current environment rather than the long term strategic
needs of our company. Instead, we chose to undertake a longer, more
comprehensive project to analyze all of our operations and make
strategic, data-driven decisions. That is still our plan. This
manager reduction was the result of careful assessments of the
management and leadership roles we need for our future success. We
are in the process of fundamentally changing our behaviors and our
structure for where our business and industry are going. You should
expect that we will continue to take actions, including selective
reductions, as we complete analyses and decisions about
investments, expense levels and organizational structures. You
should also keep in mind that at the end of this process we will
still be the largest and most profitable semiconductor company on
earth. Our actions are focused on ensuring that is true well into
the future.
I know this is hard for all of us to internalize and accept. We
have done extremely well over the past 25 years of the PC era.
But we need to adjust now for where our industry is going.
Competition will intensify across our product lines. Pricing will
be aggressive. We should not only accept that reality, but
recognize that it reflects the position we have earned in the
industry and the strength of our strategic direction. Weak
companies pursuing low-growth markets do not attract competition.
Strong companies that have commanding positions and generate strong
earnings growth are the ones that attract competition.
Our objective, and our destiny, is to refashion Intel now while we
have the means and the time to do so, and ensure we continue to
remain number one.
Paul