Intel's 5,500 strong Irish workforce will escape the immediate impact of a massive restructuring that will see the loss of 10,500 jobs worldwide, but the company suggested yesterday that job cuts next year could affect its Irish operations.
In a widely predicted announcement yesterday, Intel's chief executive Paul Otellini said the world's biggest microchip manufacturer would shed one-tenth of its workforce within the next 12 months in an effort to stem losses and regain market share. "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," he said.
Most of job losses this year will affect management, marketing and information technology functions, but the company said that cuts in 2007 "will be more broadly based as Intel improves labour efficiency in manufacturing, improves equipment utilisation, eliminates organisational redundancies, and improves product design methods and processes".
Informed sources said last night that any job losses at the Irish operation will be part of the second tranche next year, but are unlikely to number more than 200. The company is hopeful they could be achieved through voluntary redundancies, said the source.
The company employs 5,500 people in Ireland, directly or indirectly, at its plant in Leixlip and a further 150 at Intel Communications Europe in Shannon, Co Clare. Yesterday's announcement follows a three-month, internal review of Intel's operations, the most sweeping reassessment the company has made since the 1980s. Intel has seen profits fall, as its smaller rival, Advanced Micro Devices (AMD), grabs a bigger share of the microprocessor market.
Workers at the Intel plant in Leixlip were nonplussed at the news, which had been well flagged. One worker said there would be no shortage of volunteers if redundancies were sought by the company.
"It is the lads in the States I feel for. They're very worried," he said. "They don't have the employment legislation to support them. Over there, they are told to find another job within the company or else they are out. They are not obliged to pay redundancy there."
Another worker who recently joined the company said he was disappointed at the lack of detail in the webcast from Mr Otellini which broke the news to staff in Ireland and across the globe. "There are still a lot of rumours going around," he said. "Basically, it seems the further away from the core business you are, the more likely you are to be affected."
Intel shares were up 11 cents to $19.99 on Wall Street last night ahead of the announcement which came after the market's official close.