Intel has embarked on yet another restructuring exercise as it attempts to insulate itself from a slowdown in the US economy and the continuing squeeze on PC margins.
The chip giant plans to merge its Network Communications and Communications Products Groups to cut costs, and is temporarily suspending the planned $2.2bn expansion of its Leixlip plant in County Kildare, Ireland.
The latter move will result in about 1400 construction workers losing their jobs, and building on Fab 24 will not be resumed until next year. It is due to start production by the middle of 2003.
An Intel spokeswoman said: "Fab 24 will make 300mm silicon wafers, but we want to add 0.1 micron technology. Given the current environment, it is prudent to monitor the market and adjust our plans accordingly to see where we'll be in three years' time. But this is simply part of our normal adjustment process."
At the same time, Intel also announced it was creating a new Networking and Communications Group out of its Network Communications division, which sells hardware such as routers and switches, and its Communications Products Group, which sells the IXA network processor. No redundancies are expected to follow.
The spokeswoman explained: "Both groups address the needs of internet infrastructure customers. As convergence between voice and data networks becomes more imminent, the synergy between these products increase and there are a lot of shared customers here, so from a strategic point of view, this made sense."
"There will be efficiencies coming from this due to a reduction in duplication and an increase in efficiency. We're always looking at ways to be cost-effective, especially at the current time," she added.
Sean Maloney, executive vice president and former director of the sales and marketing group, will head the new organisation, while executive vice president Mike Splinter will replace Maloney as head of sales and marketing.
Splinter used to be joint general manager of the Technology and Manufacturing Group, but will be superseded by Robert Baker, former vice president and general manager of Intel Components Manufacturing.
Intel also announced that Stephen Nachtsheim, vice president and director of Intel Capital, will retire in June, while Gerhard Parker, executive vice president and general manager of Intel's New Business Group, will retire in May.
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