Intel Prepares to Slash 2,000 More Jobs

Savings from Intel's work force cut are unlikely to lower desktop and notebook prices.

Intel plans to cut an additional 2,000 jobs from its payroll to cut costs, executives announced Oct. 16 after an earnings report that showed both income and margins up in the third quarter of 2007.

CEO Paul Otellini and executives told analysts and reporters during a conference call Oct. 16 that the Santa Clara, Calif., company expects to save about $1 billion in 2008 on payroll cuts and a switch from the 65-nanometer processors to the new 45-nanometer processors, which are cheaper to manufacture.

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The strategy of reducing and saving began in 2006, when Intels employee roster stood at about 94,000. It now stands at 88,000.

Click here to read about Intels "slow and steady" approach.

The payroll reduction should not affect the price of notebooks and desktops directly, as Intel is likely to roll any savings into the research and development of more complex microprocessors, while keeping its profit margins high and shareholders content as it battles the slimmer rival Advanced Micro Devices in the market.

Earlier the week of Oct. 15, AOL announced that it would cut about 20 percent of its work force, or 2,000 employees, as the struggling Internet service provider looks to get more of its costs under control.

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