Intel, one of the State's largest employers with over 5,500 permanent and contract staff, is expected to announce worldwide job cuts of at least 10,000 employees - or a tenth of its staff - on Tuesday. Karlin Lillington and Mark Brennock report.
Many financial analysts predict that widespread job cuts, the largest since swingeing job losses in the 1980s, will be announced when chief executive Paul Otellini briefs staff on Tuesday about the results of an internal report commissioned last spring, after Intel disclosed its largest profit drop in four years.
In the company's second quarter financial results in April, Mr Otellini predicted Intel's first sales drop in five years and management said the company was unlikely to meet its 2006 sales forecasts.
Reports last night suggested anything between 10,000 and 20,000 jobs could be cut, but there was no information available about what part of the company 's operations would suffer. Ironically the company's share price was up last night in the US by 1.8 per cent.
A spokeswoman for Intel Ireland declined to indicate whether any Irish jobs would be affected. She said: "The stories that are running are pure speculation. We have no comment."
A spokesman for the Taoiseach and a spokeswoman for the Minister for Enterprise and Employment said last night that the Government had not been informed of any planned job cuts by Intel in Ireland.
Intel has been on a hiring spree in recent years with some 20,000 positions added since 2003, as the company branched into new market areas in a bid to increase demand for its chips.
But indications are that the company will slash jobs and return to its core chipmaking business after watching its losses deepen and an erosion of market share to arch rival Advanced Micro Devices (AMD), said analysts.
AMD, long in Intel's shadow, has signed supply contracts with all four leading server manufacturers and now controls 20 per cent of the global chip market and just over 26 per cent of the server market.
Mr Otellini already cut 1,000 worldwide management jobs in July and sold off two communications units that employ another 2,000 people.
Reports on leading technology news website News.com said insiders believed most job cuts would come from the company's marketing division, saying the internal report indicated it was overstaffed in comparison with rivals.
Intel Ireland does not have a marketing division, employing just one sales and marketing manager.
Ireland has felt little impact during previous Intel rationalisations. The company shed 5,000 employees in 2001, but only 170 - all voluntary - came from Ireland.
Amid some speculation that Intel would abandon Irish expansion plans, the company put the construction of its $2.2 billion, second Leixlip microchip fabrication plant (or "fab") on ice following the post-2001 economic crash, but once market conditions improved, the "fab" was completed.
Ireland was unaffected by a further 4,000 job cuts in 2002.
In June, Intel opened its third Irish fab, a 52,000ft €1.6 billion extension to its Leixlip plant, called Fab 24-2.
The plant manufacturers high-end chips for notebook and desktop computers using Intel's advanced 65 nanometer (nm) manufacturing process.
Intel had to fund the new plant itself after the EU challenged Ireland's allocation of €170 million in grant aid, stating it did not believe the monies would be used for innovation. To date Intel has invested €5.5 billion in the State.
Analysts have been demanding that the firm cut its costs and return to its core business of chip making.
Some analysts last night suggested that its job cuts plan would fall in the upper end of the 10,000 to 20,000 range.