Intel closes factories, slashes up to 6000 jobs
Intel maintains that its actions will not impact deployment of new 45-nm and 32-nm manufacturing capacity.
By Suzanne Deffree, Managing Editor, News -- EDN, January 22, 2009
Intel Corp has disclosed plans to close or end production at five of its plants and to lay off up to 6000 employees as it aligns its manufacturing capacity to current weak demand and market conditions.
Maintaining that its actions will not impact deployment of new 45-nm and 32-nm manufacturing capacity, Intel said it will close two existing assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines, and will halt production at Fab 20, a 200-mm wafer fabrication facility in Hillsboro, Ore. Additionally, wafer production operations will end at Intel's D2 facility in Santa Clara, Calif, the company said.
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Intel expects the actions to affect between 5,000 and 6,000 employees worldwide and said that some of those employees may be offered positions at other facilities. The manufacturing changes and workforce adjustments will take place between now and the end of 2009, the company said.
Intel's announcement does not come as a surprise. Financial analysts in December 2008 began questioning why Intel had not announced manufacturing job cuts on evident weakness in end demand and inventory reductions by its customers in the global PC supply chain.
Analysts continued to question Intel's manufacturing employment strategy after the company lowered its Q4 guidance for a second time earlier this month.
Intel met that lowered guidance last week when it reported Q4 sales of $8.2 billion, down 20% sequentially and 23% year over year.
The news also follows several rounds of layoffs at Intel's closest competitor AMD Inc. AMD last week announced it would shed another 1100 jobs, adding to a 1650 employee cut the company announced in April 2008.
