5000 jobs to be axed at Intel as slowdown hits
When can we officially declare the demise of Intel as a growth stock? Today the chip giant issued a profits warning which showed that it may already be a prisoner of a cyclical market.
"The economic slowdown affecting PC demand has," the company says, "continued and spread to the networking, communications and server sectors." This seems to cover just about the entire Intel landscape.
Intel reckons that Q1 sales will be 25 per cent down on Q4's $8.7 billion, rather than the 15 per cent down it forecast on January 16. In its earlier sales forecast, Intel noted the 15 per cent fall was "10 per cent worse than normal". So this new assessment shows the company is really down in the dumps right now.
Gross margins are expected to be 51 per cent, and not the 58 per cent previously forecast. per cent on Q4
The company aims to shave expenses by 15 per cent during the quarter (previously they were supposed to stay flat) "primarily due to lower revenue and profit-dependent (what's that - stock options?) expenses as well as cost cutting measures". And over the next nine months, the company aims to lose 5000 staff, mostly through "attrition". ®