updated 04:15 pm EDT, Thu April 27, 2006
The future of Intel
Intel CEO Paul Otellini has said he plans to restructure and resize in a sweeping overhaul that will affect "every part" of the company, according to one report. "We are very well aware of the realities of our current and future business outlook," Otellini said, adding that Intel is "taking actions to address the realities." Following its best ever financial year in 2005, the chip maker has been struggling with heavy competition from Advanced Micro Devices (AMD), as well as rising inventory levels, according to the Wall Street Journal. While the company recently predicted growth in revenues, a recent report showed a 38 percent drop in Q1 profit, which was accompanied by a negative outlook.
Despite increasing sales of from a newly formed partnership with Apple, the industry leader is bent on cutting costs and reorganization. "It's a much tougher 2006 than we thought a few short months ago," the executive said, announcing plans to slash roughly $1 billion in spending during the rest of 2006, along with plans for a broad overhaul. "Every part of Intel" will be part of the restructuring, which will focus on things like non-performing units, capital efficiencies and cost per unit, according to the report.
The company on Tuesday announced its new vPro technology, the newest addition to its brand portfolio targeting business and IT customers. Due in the third quarter--near Apple's WWDC timeframe--the new technology will feature an Intel Core microarchitecture dual-core processor with a 64-bit microarchitecture to offer significant gains in performance, as well as reductions in power-consumption. Apple could help leverage the speed and power consumption advantages in its future line of Intel-based Power Macs for professionals and could gain marketshare among users when combined with its Boot Camp software, according to analysts.
The tech giant is engaging in a 90-day review but will take action as soon as it identifies areas to revamp, according to the CEO. Otellini added that the decision is the biggest undertaking at Intel since the mid 1980s, and is designed to place the company in a better position for the future. When asked if the restructuring would include layoffs, Otellini did not comment on whether layoffs would be part of the restructuring.
"No stone will remain unturned or unlooked at," he said. "You will see a leaner, more agile and more efficient Intel Corp."