Intel Announces Restructuring
?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,? said Paul Otellini, Intel president and chief executive officer.
Most job reductions this year will occur in management, marketing and information technology functions, reductions related to the previously announced sale of businesses, and attrition. In 2007, the reductions will be more broadly based as Intel improves labor efficiency in manufacturing, improves equipment utilization, eliminates organizational redundancies, and improves product design methods and processes.
In 2008, the company expects the cost and operating expense savings from this restructuring to grow to approximately $3 billion as it achieves the full-year run rate on the projects implemented in 2007. In addition, Intel expects to achieve a capital expenditure avoidance of $1 billion by better utilizing manufacturing equipment and space. The company expects that approximately 25 percent of the project’s savings in 2007 will reduce cost of sales, and the rest will reduce operating expenses.