Poor Financial Performance Leads to Restructuring for Intel

In late July, Intel's sales and profits for Intel were its lowest since 2004, supporting the inception of the company's efficiency analysis launched in April. Intel is currently strategically restructuring its operations to revive growth and refocus on the company's core chip operations.

Intel is putting its efforts into a product overhaul and PC price cuts to regain market share lost to rival Advanced Micro Devices Inc (AMD). (Source: marketwatch.com)

Intel spokesperson, Chuck Mulloy recently revealed that the results of Intel's efficiency analysis would be divulged by the end of September, at the latest. (Source: boston.com)

Layoffs to Increase Efficiency

In order to increase efficiency, Intel announced 10,500 layoffs Tuesday. It was speculated previously that these layoffs will likely weigh heavily on marketing staff, as Intel reduces its staffing numbers in the marketing department to meet that of its competitors. A study conducted by the company revealed that the ratio of marketing staff to sales personnel is too large. (Source: news.com)

Additional Efficiency Efforts

According to news.com, which was first to report on this story, Intel has already made efforts to increase efficiency. The company reshuffled executive positions in July, which gave new jobs to staff who reported directly to the CEO. Earlier that month, saying that it would speed decision making, Intel laid off 1,000 managers.

In June, the company sold its Xscale communications and applications chip business, which reduced staff levels by 1,400 positions. Another 600 jobs were trimmed in August as Intel sold it's telecommunications business to Eicon Networks.

Mark Edelstone, an analyst at Morgan Stanley, noted that these announced job cuts would bring Intel's staffing levels to around the same as they were in 2004, before a recent hiring blitz. (Source: boston.com)

Additional layoffs and sales of assets are expected once Otellini completes his comprehensive review.