Intel cuts to affect up to 6,000 workers

Chipmaker to cut production at 2 U.S. plants, shut 3 facilities in Asia.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Kenneth Musante, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Chipmaker Intel Corp. announced Wednesday that it will be cutting production at two U.S. silicon wafer facilities and closing three facilities in Asia, affecting between 5,000 and 6,000 workers.

Intel, in a news release, said some of the workers could be offered positions at other facilities.

"The fact that they're taking action rather quickly to rightsize production" is encouraging, said Doug Freedman, analyst at research firm Broadpoint AmTech.

Intel, like other chipmakers, needs to scale production to a level that matches demand, according to Freedman.

The No. 1 maker of microprocessors said production will be halted at the Fab 20 facility in Hillsboro, Ore., and the D2 facility in Santa Clara, Calif.

Operations are being shut at two facilities in Penang, Malaysia, and a third in Cavite, Philippines.

The plant shutdowns are slated to occur between now and the end of the year, according to Intel.

The company said the reduction in manufacturing capacity will not affect the production of its new 45-nanometer and 32-nanometer chips.

Last week Intel posted a 90% decline in fourth-quarter earnings, as demand for computer components declined through the last part of 2008. Because of the uncertain economic climate, the company refused to offer any guidance for what the first quarter will bring.

However, Intel did say that profit margins would perk back up to normal levels by the second half of the year, even though capital spending would be relatively flat, or even recede in 2009.

"When the economy gets a headache, we (the tech industry) get the flu," said Freedman.

Intel is widely viewed as a proxy for the health of the overall PC industry, since its products are a key component for most computer manufacturers.

Shares of Intel (INTC, Fortune 500) rose 1.13% to $13.41 a share in after-hours trading. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
7 quirky luxury products for the super rich Take a look at some of the most unusual luxury products being marketed to the top 1% in Monaco, including a rotating sunbed, hand-made wooden skis and fur coats for dogs. More
Five things to know about Putin's Russia An economic crisis, Western sanctions and a comeback currency: What's going on in Russia? More
9 up-and-coming collectible cars They're relatively cheap now but these models have already caught collectors' eyes and are expected to increase in value in years to come More
Sponsors