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Massive Intel cuts likely to hit Chinese workers

By Liu Baijia (China Daily)
Updated: 2006-09-07 14:28

Xiao Wang had been lucky: she got an offer from Intel China in April to work as a product manager after graduating from a top Canadian business school, while a dozen of her Chinese classmates are still searching for jobs now.

In July, she also narrowly survived a layoff storm, in which the senior manager who recruited her lost his job.

But now, she is deeply anxious, as the US chip giant is planning to cut its workforce by as much as 10 per cent in two years its largest layoff since 1985, when it sold the DRAM memory business.

Intel said yesterday that it would shed 10,500 jobs from its workforce of 100,250 at the end of last quarter, including 7,500 this year and another 3,000 next year.

"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," Paul Otellini, Intel President and Chief Executive Officer, said in a statement.

The company said it was in a quiet period and suggested it would not reveal more details until it releases financial results on October 17.

The layoff will concentrate on management, marketing and information technology support functions, but will extend into manufacturing and product design units.

Nancy Zhang, a spokeswoman for Intel China, said she had no further details, as the announcement was only made globally.

However, analysts believe China is one area that will be heavily affected.

The channel platforms group, one of Intel's six business groups and the only business with its headquarters in Shanghai, has already merged with the sales and marketing groups.

The group was set up to design products to meet demands in different markets. Shanghai was picked to host the group, based on China's position as the world's largest manufacturing base for computers.

While that group and other units of Intel China launched a massive recruitment campaign at the end of last year, Intel China suddenly suspended almost all positions involved.