Global economic crisis hits Intel

.

Intel Corp. has declared that it would close manufacturing plants in Malaysia and the Philippines. The cost cutting measures would also involve bringing down the operations in the US.

All the three units are the "assembly test" facilities of the company. But a major cost cutting measure involves sacking 6000 employees of the company.

The decision to shut three units and cut on workforce succeeds the company's decision to slash prices on a number of processors. A week earlier the company had also reported a decline in its fourth quarter revenue due to the economic crisis.

Chip makers have to ensure that their factories are running at full throttle and paying back for the expenditure incurred on them. But the units that are just consuming the resources i. e. underutilized factories are cutting into Intel's margins. The move had to be initiated to strike a balance. Intel also clarified that the cuts wouldn't affect investment in factories specializing in 45-nanometer or 32-nanometer chips.

"It's not a surprise given that their first quarter is probably going to be challenging, and they're trying to do what they can to cut costs in places that make sense," said Taunya Sell, an analyst at Ragen Mackenzie, a division of Wells Fargo. (Supreet contributed to this report)


Latest News

Feds Expected to Trim Bond Purchases, Could Also Offer Hazy Clues on Interest Ra
After First Six Months of Sales Toyota Remains at Top
McDonald's Franchisee ruling Gives Rise to Business-Labour Arguments
Breakage in Main Pipe Causes Havoc in UCLA
Southwest Airlines to Be Charged a Fine of $12 million Over Issues Related to Re
Zillow to Purchase Trulia; A Merger That Will Create a Real Estate Giant Listing
More than One Third of Americans Debt Offenders
Video Shows Baby Turtles Heading to Sea
Bear Stearns, Alan 'Ace' Greenberg, dies at 86
Former U.S. official Says President Obama Could Restrain Corporate 'Inversions'
As U.S. Stocks Ascend, NYC Pension Funds Report 17.4%  Returns on Investments
Food Scandal in China, Parent Company to Investigate Matters