Intel Corp., which is forecast to post a lower-than-projected fourth quarter profit, announced that it expects to reduce its workforce by about 5% in 2014. Taking into consideration the fact that the chip manufacturer ended 2013 with 107,600 employees, the cuts could affect about 5,400 people currently working in the company.
Intel Corp. also announced that it expects flat revenue for 2014, which means it would probably miss analysts estimates for revenue growth of about 1.2%. The net income of the company for the period ended December 28th, was said by Intel to be 2.63 billion dollars, or 51 cents a share, trailing analysts expectations for earnings of 52 cents per share. The profit posted over the same period of 2012 was 2.47 billion dollars, or 48 cents a share. The companys revenue rose from 13.48 billion dollars to 13.83 billion dollars.
Intel has been following a restructure plan started in 2006 by then-Chief Executive Officer – Paul Otellini. Since then, the company has been reporting a steady growth, but Mr. Otellini successor – Mr. Brian Krzanich, who took over the position of Chief Executive Officer in May last year, has shifted the priorities of Intel Corp in several directions.
One of these areas, for example, is concentrating the efforts of the company to target chips for wearable devices, and also for smartphones and tablets. A conference call following the earnings release showed that there is a possibility for Mr. Krzanich, Intels current CEO, to be considering to shift employees to different jobs, and reduce overall head count.
During the call, the Chief Financial Officer of Intel Corp. – Stacy Smith, explained: “Well be bringing employment down over the course of the year. So even beyond the headline number, theres going to be a significant shift in investment over the course of the year.” In addition, Stacy Smith did not give any more details about the reduction, but one of Intels spokesmen confirmed the information. The spokesman also explained that the cuts in question did not represent a layoff plan and were expected to come through other means.
Intel Corp.s shares settled at $25.85 on Friday, down 2.60% on the day, and their one-year return rate is down 0.40%. The 38 analysts offering 12-month price forecasts for CNNMoney have a median target of $24.00, with a high estimate of $32.00 and a low estimate of $16.00. The median estimate represents a -7.16% decrease from the latest closing price.
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