Intel has begun notifying workers in its finance group that their jobs will be eliminated early next year, according to multiple employees familiar with the plans. The chipmaker had warned staff last summer that these cuts were coming, part of a broader plan to bring down spending.
Intel declined to comment on its latest layoffs or specify just how many people will lose their jobs. Sources inside the company said Chief Financial Officer Bob Swan told employees on a webcast that he's looking to cut expenses within the finance group by 20 to 30 percent, in line with industry benchmarks.
However, other sources said that doesn't necessarily mean employment will decline at that rate because Intel could cut expenses in other ways, too. Intel's finance group has historically employed about 1,400 in the U.S. and several hundred more overseas.
These cutbacks won't be nearly as large as reductions Intel made last year, when it eliminated 15,000 jobs companywide to prepare for long-term decline in its core market, supplying microprocessors for PCs and laptops.
But employees say Intel is offering substantially less in severance benefits than it did in 2016.
Some long-serving workers received nearly a year in pay when they lost their jobs last year, plus additional medical coverage. This year, multiple workers facing layoff say Intel offered them only one week of pay for each year they've been with the company.
This fall's job cuts reflect Intel's plan to reduce expenses after years of spending increases while the chipmaker explored new, potential markets. Intel is working to reduce overall spending to 30 percent as a share of revenue, compared with 36.5 percent at the start of the year.
"Honestly, I think we have too many people," Swan told finance employees in August, according to information obtained by The Oregonian/OregonLive last summer. The CFO told employees the finance group would have to shed jobs to operate more efficiently and meet Intel's spending targets.
Three employees with direct knowledge of this fall's cuts said Intel managers began pulling aside workers on Friday, Oct. 13, to notify them of their pending layoff. Employees said they were given until the end of January to find another job within the company before losing their jobs, but said they were told they must continue doing their current job while they search.
Intel's headquarters are in California but it employs more than 19,000 in Oregon, more than any other business. A large portion of the company's finance staff works in Washington County.
Intel's stock has lagged the broader chip industry over the past few years as it adjusted to the decline in PCs and laptop sales.
But revenue has been growing the past two years due to growth in Intel's data center business. Additionally, Intel has invested heavily in new segments, such as artificial intelligence and autonomous driving, in hopes of creating new markets for its computer chips.
Intel shares closed at $40.25 at Wednesday, their first close above $40 in nearly 17 years. Shares are up 14 percent over the past two months amid growing investor optimism about the company's new markets and signs that declines in PC demand may be slower than expected.
Intel reports third-quarter financial results on Oct. 26.
-- Mike Rogoway; twitter: @rogoway; 503-294-7699