Intel to cut around 5400 jobs as company admits it overestimated demand

In order to cope with the changing PC market, Intel CEO Brian Krzanich announced late last week that the chip giant will cut 5 percent of its workforce, which amounts to about 5400 jobs. An Intel spokesman explained that the job cuts would be ongoing throughout the year to align resources to meet the needs of the business.

In related news, Krzanich acknowledged to investors that Intel overestimated PC chip demand. The chip giant recently revealed that the newly constructed Fab 42 will not enter production in the foreseeable future as 14nm production equipment will be installed in existing fabs rather than in the new Fab 42.

Asked during the earnings call about Fab 42, Brian Krzanich, Intel’s chief executive said, “When you start these construction projects, you have to start them three years in advance. They are some of the most complex construction projects imaginable. We started this one three years ago. Our view of the PC industry and PC growth three years ago was much more robust than it is today.”

Krzanich went on to explain how the time it took to get the project started allowed Intel to react to the lower-than-expected demand for microprocessors. “We brought it up until the shell was complete and we held back putting equipment in until the demand requirement comes about,” he said, adding that the time taken to do so is part of the procedure that has been in place at Intel for the thirty years Krzanich spent in manufacturing at the company.