Sticking To Business
by Paul McGoldrick
The plan for Intel to shed about 10% of its employees --
10,900 warm bodies -- has finally been announced. It is not a surprise,
having been forecast for some time and following on Voluntary Separation
Schemes in Malaysia, even while new plants are coming on line there.
The market punished the company the day cuts were announced, by hitting the stock price, probably because they were hoping the number of discharged employees would be at the higher end of previous estimates -- about 15,000 -- and would not include the numbers in previous layoffs of managers and employees shed with sold divisions.
But why were the layoffs necessary?
The official line is that with AMD's growing success in the microprocessor market, the company needed to become more competitive. That, of course, is far from the simple truth: that the organization has spent far too much time and money in recent years dabbling about with projects that went nowhere and trying to get into markets where they simply did not fit.
Even with the sell-offs that have been made, Intel still has products in storage, software, network connectivity, Flash memory and even parts of their wireless portfolio that are simply not them. And, of course, their great Healthcare push is bizarre, putting themselves head-on with the likes of Philips.
Time and time again you see companies diluting their efforts in their core business by going off on the search for something sexier. National Semiconductor was the primary example in the last couple of years -- and Tektronix, before that.
This is such a simple message. Why don't some CEOs think before they
invest by standing back and looking more closely at what they are getting
into? It would be like analogZONE getting
into the airline business because we use airplanes.
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