I'd like to see the breakdown of those layoffs. Upper management obviously blew it in terms of reading and responding to the market, but my bet is that those below them will bear the bulk of the hit. This is the point where there should be announcements of senior managers retiring and opening up positions for younger people with better perspectives on the current market.
Intel has enough money in the Bank and under used Fabs. All they need now are better & cheaper designs that will bring back customers. So design not fab needs to be emphasized.
They need to embrace new end-uses, apps, architecture and low-power chip design rather than keep depending on just ever smaller & faster transistors. Internal organization is optimized to maintain the hold on legacy x86 products. Since that monopoly is going downhill, the organization needs to change too. Need to become more creative.
They would say that wouldn't they! In the past any redundancy numbers were shrouded in secrecy. That is, after the workers left the company, Intel did not state exactly how many redundancies there were. So, they could say 5% now but the actual number could be closer to 10%...
I don't believe Intel will be able to hit its target strictly through attrition. Intel has been offering early retirement packages to manufacturing personnel for over a year, but few have been willing to accept the package. There is no doubt that some of this will come from manufacturing, but I believe additional reductions from the product groups may be necessary by the end of the year, especially if margins are impacted by competition, such as from ARM-based server processors.
Company ruled the world by introducing the power hungry processors every year without peripherals, continuously changing the marketing strategy of the connectors, not by innovation, and miss leading advertise, Intel inside.
The nano-scale reduction and the increasing K of insulator, reached its limit now,
There is no more fool around.
The latest SOC and Specific purpose IC dominating the market.
To claim that Intel has not been innovative is not remotely accurate. Many well funded companies took runs at Intel, only for Intel beat them .... not just by manufacturing might, but by technical excellence.
They have been transitioning their current architecture into low power and arguably based on recent tablets they are competitive.
Add in strong developments over the years in multi-cell memory, strong wifi offerings, way ahead in manufacturing, etc. .....
In terms of peripherals, that is not remotely true either. Integrated GPU, ports, etc. and/or companion chips with all the ports, arguably a good plan as you tune mfg for what you are trying to accomplish on a chip by chip basis.
To stay on top in such a fast moving industry for so long is really quite an accomplishment and should not be discounted.
There's probably no disputing the technological achievements over the years. But see how suddenly a change of business climate affects the originally successful business model and the need to deploy originally planned new technology.
B-School students will study this in the future, guarentee. Like Nucor steel with mini-mill taking down US Steel monopoly by attacking at the side. You cant attack a sustaining innovator in its primary market. Didnt work for AMD. Foundry players drive aggressively down prices and make parts that are unattractive from Intel margin standpoint for years. Then the market shifts and foundry is positioned to succeed and intel takes a beating. What happens next an entire industry is watching..
The reason for Intel's monopoly getting challenged is the growing population of smart phones and tablets which are now outnumbering the no of Wintel products . These smart phones and tablets are based upon non Intel processors and that is the real cause for pressure on Intel to downsize.
Every year that Microsoft came out with a new version of Windows, there was a burst of PC purchases, except for Windows 8. When it came out, we saw the largest drop in PC sales in history.
Whether it is because of people not liking Windows 8, or because of lots of people using tablets or smartphones (with ARM processors) in place of desktops, I'm not sure. But I can see how Intel could have misjudged the market. Acer, HP, and Dell are also hurting.
The light at the end of the tunnel is XP. Lots of companies (where tablets will not replace desktops) still have a lot of machines running XP. This year Microsoft will stop supporting it, and a lot of companies will switch to Windows 7, and maybe Windows 8 for the more adventurous. I can see a lot of these PCs getting upgraded in the process.
So the end of XP may have the same effect that new Windows OSs used to have. Maybe Intel shouldn't be canceling that new fab or be doing cutbacks just yet.
I remember that Windows 6 AKA "Vista" was also a disaster for Microsoft. It seems they have trouble with even-numbered releases. A lot of business users stuck with XP and Microsoft decided to extend the life of XP. Many users replaced Vista on new machines with XP so that software and device drivers would work.
I suspect that a lot of XP machines are out there to support old software, and when XP is no longer supported the users will simply take those machines off the Internet to protect them from malware. Given the amount of re-learning to switch from XP to Windows 8, I also suspect that a lot of users will switch to Ubuntu or other GNU/Linux distros because they're less of a leap. Plus, a lot of users really only need a browser and a Chromebook becomes a lot less of a headache than administering a full-blown OS. IMO, the thing that's holding back Chromebook is that the screens are too small. With a bigger screen, they become a perfect solution for many users.
If you look at a Dell catalog, computers for professionals all come with Windows 7 and computers for people who don't know any better have Windows 8. Sounds like the marketplace has made its decision.
it may also be somewhat attributed to the big interface changes that happened with these releases. Vistan looked different than XP, but 7 kept the vista look. 8 looks different than vista/7 etc. Maybe 9 will be the same as 8, but more of a success.
I like the look of 8, but admittedly haven't had much of a chance to test drive it yet.
The question now is which workers will Intel lay off, why and how? And if they aren't laying workers off, exactly how will they be able to reduce the workforce? It will be a combination of things, certainly, but there's no avoiding that five percent is a significant number and difficult to attain.
Another newsite (maybe the Oregonian? I can't recall) mentioned that normal turnover at Intel is 4% annually. But attrition and hiring freeze isn't enough becausee there are strategic considerations of who to keep, even who to add, while aiming for that target number on your salary spend. Best wishes to all.
Intel came back to EE Times after close on Friday and said: "When we talk about reduction of the workforce there are a number of things that can happen. It could include redeployments, voluntary programs, retirements, and through attrition. All are options so it would be wrong to conclude this is a layoff. Our usual rate of attrition is close to 4 percent worldwide."
I wonder what the message to our young people in the US is. Our industry asks for more H1B Visas because we cannot get enough people working in our industry. We also struggle to recruit young people to choose related technical fields in their studies. Then, there are massive layoffs at IBM, HP, Intel and so on. What message do these layoffs tell to our potential young talent which we try to recruit? Why would a young woman or man want to work in this industry when job security is like a roller coaster? These layoffs have a much deeper impact long-term on our industry and society than we comprehend. Is it really worth just to save a "few bucks" or to satisfy the stock market?
Excellent post. Hire U.S. graduates and train them. It worked for a long time and created a great high tech eco-system in this country. On the other hand, keep shipping jobs and knowledge out of the country and see how hard it becomes to find technical leaders for your fab, design and r&d centers. Just try and find an experienced wafer fab engineer these days....
Andrew Grove said (Intel's CEO 1979-1997): "While the story is unique to Intel, the lessons, I believe, are universal" ― Who is Intel's biggest Threat? see the answer here: http://anysilicon.com/intels-biggest-threat/
it sounds like people are fairly cynical about Intel's latest announcement. There could be good reason for the decision to cut back the workforce and it may yet involve something other than lay offs. Furthermore, the decision may not impact US workers, in fact they may still be looking to invest in the United States. But the general response is no, they are looking to cut back their workfroce and do so by giving many workers the ax, with no additional pay to the rest, and a misguided product roadmap. We shall see.