Intel announces restructuring to save $2 bn in 2007

Bangalore, Sep 6: Intel today announced implementation of restructuring plans that would result in saving in costs and operating expenses to the tune of US dollars two billion in 2007.

The savings were a combination of non-workforce related steps and a significant reduction in Intel's workforce that would reduce to approximately 95,000 by the end of this year. The strength would come down to 92,000 by the middle of 2007, 10,500 fewer than the company's employee population at the end of the second quarter of 2006, the company said in a release here.

The restructuring plan, cutting across all geographies where Intel was present, would also have an impact on its Indian operations. Intel India currently had an employee strength of approximately 2,600 and its Bangalore operations include the largest number of Intel divisions in any country outside the US.

In 2008, the company expected savings from the restructuring plans to grow to approximately three billion Dollar annually. In addition to the savings from the workforce reduction, the company expected savings in merchandising expenses, capital and materials, the release said.

''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,'' Intel President and Chief Executive Officer Paul Otellini said.

Most job reductions this year would occur in management, marketing and IT functions. In 2007, the reductions would be more broadly based as Intel improved labour efficiency in manufacturing, equipment utilisation, elimination of organisational redundancies and product design methods and processes.

Besides, Intel expected to achieve a capital expenditure avoidance of US Dollar one billion by better utilising manufacturing equipment and space, the release said.

UNI