Intel preps for layoffs: Chipzilla sharpens axe for deep job cuts

And it is all the fault of the soggy PC market

Job queues in Intel’s home state of Oregon are to swell in 2016 with Chipzilla steering thousands of workers to the chopping block.

So claimed local paper The Oregonian, where Chipzilla is headquartered, with the employee cull said to start after Intel reports its Q1 numbers next week.

According to the loquacious sources the paper quoted, some areas of the business could be hit by double digit percentage headcount reductions, with thousands tipped to leave by the end of the year, far outstripping the 1,100 laid off in July 2015.

The reason for the belt tightening exercise is the lacklustre demand for traditional PCs. All of the major analysts are forecasting smaller shipments this year, compared to last year.

Many businesses upgraded from Windows XP a couple of years ago and Windows 10 is not expected to drive larger volumes of purchases of standard desktops and notebooks until 2016.

PCs still account for the majority of Intel’s revenues, around 60 per cent, leaving it exposed to the spending fall. None of the major PC makers grew in Q1 and, globally, shipments into channels are tipped to shrink 3.9 per cent from last year.

The growing popularity of mobile devices is also a part of the market where Intel has struggled to replicate PC market dominance – though even here smartphone and to a greater extent, tab growth, have been clipped in recent times.

The Oregonian attributes the decision to cut staff to ex-Qualcomm recruit Venkata Renduchintala, who believes there are “schedule and competitiveness gaps” in Intel's products.

Scheduling has become problematic for Intel as it tries to keep Moore's Law on life support, and it recently abandoned its famed “tick-tock” methodology to cope with delays in its shift to 10nm fabrication processes.

The Intel C-suite has also been fluid in recent times, with departures in its mobile, PC, and Internet of Things divisions.

The Oregonian reckons that might not be the end of the shake-up, saying other executive roles are “in flux”. ®

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