Intel to shut down five plants

Intel is set to lay off staff

Intel is to close five manufacturing plants, in a move which could affect up to 6,000 employees.

The announcement comes just two weeks after Intel claimed that it was weathering the economic storm, and would not need to make any of its staff redundant.

Two assembly test facilities in Penang, Malaysia are to be shut down, along with another in Cavite in The Philippines.

Two silicon wafer fabrication plants in the US will halt production, including Fab 20, a 200mm wafer facility in Hillsboro, Oregon, and the D2 plant next to Intel's headquarters in Santa Clara, California.

Intel said that not all of the 5,000 to 6,000 employees affected by the closures will be made redundant, and that some may be transferred to other facilities.

However, sources close to Intel estimate that between six and seven per cent of the chip giant's 84,000-strong workforce face losing their jobs between now and the end of 2009.

Yesterday, Intel employees reportedly received a memo from chief executive Paul Otellini, saying that the firm might report its first loss this quarter, after 21 years of profitability.

Intel said that it will now work towards consolidating and streamlining elements of its older manufacturing capabilities, while pushing ahead with its 45nm production and plans for 32nm manufacturing capacity in the fourth quarter of 2009.