Intel plans 269 layoffs in Folsom

Tech Researcher Justin Lipman interacts with a large monitor array at the Intel facility in Folsom on Friday, March 21, 2014.
Tech Researcher Justin Lipman interacts with a large monitor array at the Intel facility in Folsom on Friday, March 21, 2014.

Intel Corp., embarking on a plan to cut 11 percent of its global workforce, plans to lay off 269 workers at its Folsom research campus, the chipmaker told state officials Monday.

The disclosure marks the latest downsizing at one of greater Sacramento’s largest and most important private employers.

In a notice filed with the Employment Development Department, as well as officials with the city of Folsom and Sacramento County, Intel said the layoffs will take effect by the end of May. The notice came a week after Intel announced a major restructuring that would eliminate 12,000 jobs over the next year. That amounts to roughly 11 percent of its workforce and represents the largest cutback at the company since 2006.

In a separate EDD filing, Intel said it plans to eliminate 296 jobs at six different locations in its headquarters city, Santa Clara.

The layoffs in Folsom amount to a little more than 4 percent of the company’s 6,000 employees there. But it’s also the second significant downsizing in a little over a year. Last year Intel said it would eliminate 152 jobs in Folsom.

It wasn’t known if further layoffs in Folsom are coming, beyond those disclosed Monday. Company officials weren’t immediately available for comment. The company previously said most of the affected employees would be notified over the next 60 days, although some wouldn’t get the word until 2017.

Last week Intel said the downsizing is part of the company’s attempt to transition from being a maker of desktop computer chips into a supplier of semiconductors for smartphones and other mobile devices. Although the company reported last week that it earned $2 billion in the first quarter on revenue of $13.7 billion, those figures were below Wall Street expectations. Intel’s revenue from PCs dropped 14 percent.

Intel also slightly reduced its revenue outlook for the balance of the year.

“The opportunity now is to accelerate this momentum and build on our strengths,” said Intel Chief Executive Brian Krzanich in a statement last week. “I am confident that we’ll emerge as a more productive company with broader reach and sharper execution.” Intel said the restructuring is expected to reduce expenses by $750 million this year, and $1.4 billion a year starting in 2017.

Intel continues to get 60 percent of its revenue from desktop PC chips, meaning the company is largely tied to a business that has been in decline as consumers increasingly use tablets and phones for computing.

Two weeks ago market researcher Gartner Inc. said worldwide shipments of PCs fell by 9.6 percent in the first quarter, compared with a year ago. It was the sixth straight quarter of declining shipments.

“PCs are not being adopted in new households as they were in the past, especially in emerging markets. In these markets, smartphones are the priority,” Gartner reported.

Several titans of the Sacramento-area tech community have undergone major upheavals in the past decade or so. Intel’s employment in Folsom and elsewhere in greater Sacramento surpassed 8,000 jobs before the dot-com implosion of 2001.

Hewlett-Packard has significantly downsized its Roseville operations, which once employed 6,500 workers. Apple Inc. went through a major downsizing in Elk Grove about a decade ago, although lately it has undergone a revival by taking on repair work for iPhones through a subcontractor. That’s translated into hundreds of new jobs.

Information from The New York Times was used in this report.

Dale Kasler: 916-321-1066, @dakasler