One of the largest
chipmaker companies in the world, Intel, plans to cut about 11% of its entire
workforce or 12,000 jobs globally, most within the next 60 days. The
company was able to grow and maintain stability through the PC industry, but is
no longer able to compete with mobile devices. About 60% of Intels sales
came from the PC industry, so with a decrease in demand for PC's there has been large negative impact on Intel. For the future, Intel plans to invest more in
"growing" areas of business like gaming and tablet devices.
"Sales in Intel's microprocessor and chip division rose 2% to $7.5
billion over last year, but dipped 14% from last quarter." meanwhile,
"The Internet of Things group reported 22% growth to $651 million, while
the data center division logged a 9% increase to $4 billion." The company predicts to save $750 million this year and $1.4 billion by the middle of next year from job cuts. I'm interested in seeing how this effects the labor force as well as how the company progresses.
http://money.cnn.com/2016/04/19/technology/intel-layoffs/index.html?iid=hp-toplead-dom
It is a sad, yet not entirely surprising fact that Intel is being forced to fire a large amount of the employees. Employee payroll is actually a large part of a company's expenses since they usually have to pay for the healthcare, medicare, and other tax purposes of an individual who works for the company. As supply and demand play out in the world of technological services, it seems like the company is really losing market share to some of its competitors (most probably Apple). With so many people unemployed after these actions are completed, there will obviously be more unemployed people in the economy. This will probably increase the overall employment rate, and it will be interesting to see how this all plays out in the future.
ReplyDeleteThis is a shame to see and I am curious to which countries are most effected by these cuts. I am assuming the majority will be from America, but I with a company as big as Intel I am sure many will come from other countries. However, I feel that the tech industry is one that will be consistently growing in the future so their ought to be plenty of other places for these employees to go. Yet, this will surely negatively impact short-run employment.
ReplyDeleteI'll be interested to see how Intel bounces back from this. Obviously they are going to cite the many benefits of the cuts, but obviously the many challenges they are facing are pretty severe to warrant a lay off. I also am curious about the upcoming stock performance. Usually companies that announce layoffs experience a sharp boost in their stock price.
ReplyDeleteIt seems that the current CFO of Intel has also decided to take on a new role. The CFO will move to lead sales, manufacturing and operating. It also looks like most of these cuts will occur within the United States. It will be interesting to see who they hire as CFO and what he will bring to the company.
ReplyDeleteAs Samuel said, Intel will be highlighting the benefits from the cuts to keep shareholder and consumer confidence, but how will their loss of labor improve sales like they say it will? I am personally surprised that Intel didn't shift over to the phone and gaming side of the market sooner.
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ReplyDeleteIt is amazing to see a company involved with technology having to cut so many employees. In the 21st century, the tech industry seems to be one of the only things that is safe when it comes to employment. It will be interesting to see how Intel recovers from this event with items like tablets. Hopefully, they will bring some new innovations to the industry.
ReplyDeleteI am not surprised that Intel is suffering. At Ohio Wesleyan, I feel like everywhere that I look, I see a student with an Apple computer. Not many people are buying PCs anymore and Intel is suffering as a result. It will be interesting to see how Intel changes its business model and if they will find the opportunities for growth.
ReplyDeleteAs the Apple brand continues to dominate the computer industry, the demand for PC's will continue to decline. I am not surprised that Intel is cutting 11% of its workforce because the Intel's management team is trying to keep the company afloat. I am very interested to see what new innovations and how Intel will perform in the computer chip market.
ReplyDeleteI am interested to see how this will influence Intel's stock. The immediate result of this news decreased the stock price, however, it seems it has rebounded and now hovers around the same price it did before the announcement. What is more concerning is the company's stock is down around 8% for the year.
ReplyDeleteIts a shame that a business that had so much involvement with the creation of the computer is now losing its stake in the technology market.
ReplyDeleteIt is not that much of a surprise to see Intel forced to lay off some of its work force. When other companies are able to use cheaper labor abroad, any little bit helps for that competitive advantage and unfortunately, sometimes that does result in jobs being lost. Apple has dominated the computer market for a few years now, and they don't look like they're stopping anytime soon. The cost of labor is just too high for Intel to be able to compete with such a large work force. I'm very curious to see how this affects Intel's future earnings and financial health.
ReplyDeletethis was a very interesting article. I feel like they will make up these jobs by purchasing robots that can do the same job the people were doing but at a much faster and efficient way. I don't think that it will hurt there production but will definitely make production cost cheaper.
ReplyDeleteThis is a very interesting article. While I understand this article is referring to the job cut as a result of loss of sales, I believe that these layoffs were due at any point in time in the near future and may not have been caused by just sales drops. Technology is becoming a huge threat to the work force and these jobs would have most likely been taken over by technology if sales didn't cause their demise first.
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