Intel may cut workforce at Penang, Kulim plants

GEORGE TOWN: Chipmaker Intel is likely to reduce its workforce in Malaysia following a recent decision to cut its worldwide headcount by 12,000 or 11% of its entire global workforce, which stands at about 107,000.

Although Intel did not state in which geographical regions the axe on headcount would fall, it is believed that its facilities in Penang and Kulim would be among those identified for the headcount reduction exercise.

Sources told StarBiz that up to 10% of the 13,500 workers in Penang and Kulim might be affected by the world’s leading chipmaker’s move to trim its headcount due to redundancy and mature product lines.

“Intel’s acquisition of Altera last year had created some redundant headcount in Penang. Kulim is another site that is likely to see a further reduction in headcount.

“Last year, Intel had already shifted workers involved in manufacturing the mature products for the desktop PC market to its facilities in Ho Chih Minh City and Chengdu, where there is cost-savings on labour,” the sources said.

The Kulim facility, set up in 1995, manufactures motherboards and assembles processor packaging.

The headcount restructuring will eliminate about 11% of Intel’s global workforce by mid-2017, aiming to “accelerate evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices,” according to a statement from the giant chipmaker.

Intel has strategised to venture in recent years to mobile and emerging technologies such as healthcare, wearables and other connected devices.

The company projects a lower revenue for the year, expecting it to rise in mid-single digits, down from its previous forecast of mid-to-high single-digits. It said it would record a pre-tax restructuring charge of US$1.2bil in the second quarter and expected annual savings of US$1.4bil per year starting mid-2017.

When contacted, Intel SEA public relations manager Kim Danker said the company was not providing site-specific information at this time, as it was still evaluating the plans.

“Overall, however, we expect that these actions will result in a reduction of up to 12,000 positions globally by mid-2017 through site consolidations, a combination of voluntary and involuntary departures, re-evaluation of projects, and an increased focus on efficiency in a variety of programmes,” she said.