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Intel trims jobs, but workforce near peak

Company plans restructuring to pursue, invest in new markets

By Mike Rogoway, The Oregonian
Published: April 14, 2017, 4:59pm

Intel is cutting jobs in its finance organization and sales and marketing group as the chipmaker continues pressuring its divisions to reduce operating costs.

The company is still hiring, though, and said Thursday that its Oregon workforce now totals 19,300 — just 200 off its peak before major cutbacks began 12 months ago.

Intel declined comment on the most recent job cuts, but sources inside the company said they could number in the dozens or perhaps more than 100 at a business that employs 106,000 around the globe.

That makes them an order of magnitude smaller than job cuts in 2015 and 2016. Last year alone, Intel eliminated 15,000 jobs across the company to prepare for long-term decline in its core PC business.

In its finance group, Intel is consolidating work across many sites into “shared service centers” in Costa Rica and Malaysia. Sources familiar with Intel’s plans said few if any people will lose their jobs, and that Intel slowed hiring of junior employees last year in preparation for the shift.

Employees in Intel’s sales and marketing group learned last week that the organization will lay off workers to comply with “corporate spending targets,” according to memo from Greg Pearson, the Intel vice president who manages the group. The memo sent to employees earlier this month outlined other spending cuts, including restructuring a portion of the organization, but did not specify how many people will lose their jobs.

Sales and marketing represents less than 2 percent of Intel’s total workforce, according to 2015 employment data reviewed by The Oregonian/OregonLive. And there is no indication this month’s cuts are especially large.

When Intel began its broad restructuring last year, the company said it needed to cut back in some areas to free up resources to invest in new opportunities. Those include memory chips, self-driving cars and a new class of connected devices and appliances known as the Internet of Things.

As Intel pursues those new markets, its sales have been buoyed by growing demand for microprocessors to run the large data centers that power the internet and store vast amounts of corporate data. Revenue grew by more than 7 percent in 2016, to an all-time high of $59.4 billion.

Though Intel’s headquarters are in California, the company’s largest and most advanced operations are in Hillsboro, Ore.

Intel laid off 784 Oregon employees during last year’s cutbacks and offered buyouts or early retirement packages to thousands of additional employees in Washington County. The company remains the state’s largest private employer, though, apparently because Intel has hired for new local positions.

In other places, the cutbacks have had a profound effect. Several small sites closed altogether, and Intel disclosed this week that it has reduced employment at its aging factories near Albuquerque, N.M., by 37 percent in the past year. According to the Albuquerque Journal, Intel now has 1,200 employees working there — down from 1,900 at the end of 2015.

The New Mexico site employed 3,300 as recently as 2013, according to the Journal. But Intel has skipped three generations of manufacturing upgrades in New Mexico, putting the factory there in danger of obsolescence.

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