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Intel Ireland to implement Q4 cost cuts
Tuesday, September 24 2002
by Matthew Clark


Chipmaker Intel has told workers at its massive facility in Leixlip that they
will be required to take two weeks leave over Christmas.





A company spokesperson explained to ElectricNews.Net that most of the company's
3,200 employees will be asked to take leave between 20 December and 6 January, as
the firm prepares for sluggish sales following Christmas. The spokesperson
explained that employees who have no annual leave remaining for 2002 will be
asked to take an unpaid break or dip into their holiday days for next year.





In addition, a limited number of employees will be required to participate in a
so-called "warm-down" between 22 December and 2 January. Cleaning, maintenance
and service operations will continue throughout the warm-down period. The
announcement was made to employees 12 days ago, the spokesperson said, and so far
workers seem to be reacting well to the news. 



"The move is a cost-saving measure, and there are three bank holidays during
that period so we hope they [employees] won't find the measures too draconian,"
the Intel Ireland spokesperson said. He also said that between now and Christmas
staff had been offered the option of taking two additional weeks of unpaid time
off, but this programme is not mandatory. 



The company spokesperson admitted that "it's a tough time for the chip
business," a sentiment that resonates throughout the company all the way up to
Chief Executive Officer Craig Barrett, who in late August said that demand for
PCs and the chips they contain may not rebound during the holiday season this
year. "There is always some anticipation of a holiday season up-tick in
computer sales, but whether that materialises or not is a question mark,"
Barrett commented during a trip to Malaysia in August. 



 

Consumers, who make up a third of the PC market, are expected to hold off on
buying new PCs this year for Christmas, a time that PC makers and chipmakers can
generally depend on for booming sales. And with businesses still keeping a tight
rein on IT spending, the prospect of a full recovery in the semiconductor
industry this year, or even in the early months of next year, has effectively
been stymied. 



Earlier in September, research company IDC said that shipments of personal
computers will be lower than expected this year and next because of lacklustre
demand from consumers and large businesses. Shipments will rise 1.1 percent this
year to 135.5 million, IDC said, revising its 4.7 percent gain estimated in June.
"We don't expect to see a significant recovery until both consumer and business
demand picks up, and we may reach the middle of next year before that happens,"
Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker, said when that
report was released. 



Still, Intel and most others involved in the semiconductor business expect
long-term growth, and Barrett himself constantly notes that innovation and
investment in new technologies and techniques will drive recovery in the
industry. In this vein Intel said in April that construction at Leixlip on its
latest semiconductor facility in Ireland, Fab 24, will re-commence after a
one-year work stoppage. The warm-down over Christmas and the New Year will not
affect work at Fab-24. 



When fully operational, Fab 24 is expected to employ approximately 1,000 people,
and currently over 120 Irish employees who will eventually work at Fab24 are
working at Intel's technology development centre in Portland, Oregon. To date
there are already 300 people assigned to the Fab 24 project.