Intel is widely expected to announce deep cost-cutting measures as soon as today that could see the world’s largest computer chip maker cut 10,000 jobs - 10 per cent of its workforce.
The company, which is aiming to save $1 billion a year, launched a review of its business in April in the face of depressed prices for processors and fierce competition from smaller rival, Advanced Micro Devices.
Unconfirmed reports in recent days have suggested as many as 20,000 jobs could go after a 56 per cent slump in Intel’s second-quarter profits.
According to Wall Street analysts, the company is likely to cut costs in non-core businesses, such as its flash memory unit, which is struggling to break even, and other “poorly focused science projects”.
These non-core units reported combined operating losses of $800 million in the second quarter, compared with $1.9 billion in profit from Intel’s core personal computer and server microprocessor units.
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“We also think that Intel has very limited ability to cut either product development or marketing costs without imperilling the business recovery the company hopes to achieve,” Merrill Lynch analyst Joe Osha said in a note.
Others have suggested that Intel’s marketing staff - seen as bloated compared with the company’s peers - could bear the brunt of a jobs cull.
Some unprofitable units have already been sold – including its communications chip business to Marvell for $600 million
In July Intel cut 1,000 management jobs and reassigned five top executives to new positions.