Intel Cuts And Wall Street Nods
President and CEO Paul Otellini brought the number of jobs eliminated from the chipmaker to 10,500, but that number did not impress investors.
Intel has had a tough time since April of this year, when Otellini and other Intel executives began to scour the company for any branches that could be pruned from the corporate tree. They didn’t find very many.
“These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come,” said Otellini.
The restructuring announced today puts the job reductions at 10,500. That only adds 5,500 jobs to the 5,000 already chopped away.
“As a result of the restructuring, the company expects to generate savings in costs and operating expenses of approximately $2 billion in 2007. In 2008 the company expects savings from this restructuring to grow to approximately $3 billion annually,” according to Intel estimates.
Management, marketing, and information technology will feel the keen edge of Otellini’s pruning shears. A combination of attrition and the previous sales of businesses will account for many of these positions.
Shares of Intel dropped 68 cents to 19.31 today. They had fallen another six cents in after hours trading by 7 pm Eastern Time. But the problem with deeper cuts is the risk of trimming people who will be essential to Intel’s dreams of a comeback.
David Utter is a staff writer for WebProNews covering technology and business.