Search is on for missing Intel managers Analysis 99,900 employees
and counting downBy Mike Magee: Sunday 16 July 2006, 11:36
INTEL'S DECISION to make 1,000 managers redundant could well be the right thing to do, but it begs questions about which managers have gone from which divisions, and whether further cuts will follow.
CEO Paul Otellini's memo to all Intel staff last week said senior and first line managers were affected by the decision. Intel took the decision because of "slow and ineffective decision making" caused by too many management layers.
Intel's head count, according to its own web site, is 99,900 over 199 worldwide offices and facilities. Intel here, is not... "a very hierarchical company so a formalized organizational structure is not a particularly good representation of how the company works"..
Only a few years ago, Intel's head count stood at far less than this staggering 99,900 figure . AMD's headcount, in contrast, is around 13,000 plus. If you've several factories, a large headcount is somewhat inevitable - the logistics and manpower involved in operating top end fabrication plants is far from trivial.
Otellini said in his memo that the manager move is only one of the first to come out of its 90 day reviews and said
the number of managers has grown faster than its overall employee growth. However, as some readers who work for Intel have pointed out to us,
while too many managers may spoil efficient communications that may be because, ironically, there's too much communication.One said: "The cuts were supposed to chop out bad decision making, but what they really are is a sop to Wall Street to prop up the stock price. I know of two very senior people who were let go who were both very influential in the company and well respected. Both of these guys had one thing in common: They took risks and called out senior management to make changes."
When the efficiency guys come calling in a corporation, the reaction of many middle managers is to frantically cover their own butts, but in doing that, people stand the risk of running straight into lamp posts. Managers may not want to tell their managers about problems because they fear they'll catch the flak. And telling the Emperor the truth about what's happening may just be too tough to do.
As Otellini has already said that the 1,000 manager cut was only the first of other major moves, we wouldn't be surprised if another 10,000 jobs are on the line. In the Roman army, out of every 10 soldiers, one was executed. That process was called Decimation.
The disposal of Intel's comms division to Marvell the other week was one of the moves associated with the review. Otellini, in his memo, hasn't ruled out other such deals. One candidate for wax could be its flash division - AMD's decision to spin off its flash unit as Spansion looks like it's paid off for Hector Ruiz.
Historically, Intel has preferred to redeploy or not employ people when the going got tough in the past. But that 99,900 figure does seem disproprotionately high. We're sorry when any jobs go at any IT companies because we all kind of swim in the same pond. But the shareholders have already demanded stiff and stern action to restore Intel's share price to its former glory. We've met Otellini many times over the last 15 to 16 years - he's a no-nonsense guy who undoubtedly is capable of making and taking tough decisions.
The firm releases its quarterly results later this week and as we've pointed out previously, for its next generation processors to start clocking up significant revenues will surely take more than one quarter - it hasn't yet formally announced its Merom family of notebook processors. µ
