Intel became the latest victim of a slowing US economy Thursday, when the company announced it will drastically reduce its workforce and slashed revenue expectations for its first fiscal quarter.
The chip behemoth will cut 5,000 jobs over the next nine months as part of an effort to offset lagging revenues, the company said in a statement issued Thursday afternoon.
The company expects revenue for its first quarter to fall 25 per cent from the immediate prior quarter, when revenue was US$8.7 billion. Intel had previously indicated that first-quarter revenues would be down 15 per cent from the prior quarter.
Research and Development expenditure will also be cut 15 per cent from the prior quarter's total of $2.4 billion, the company said.
Intel cited a weakening PC sector as the main reason for the revisions; however, the vendor also said demand for networking, communications and sever products also slowed.
Intel is due to report its first-quarter financial results on April 17.
Intel has met the same fate as some of the technology industry's other large players. Other companies to announce layoffs in recent weeks include Nortel Networks, Dell Computer, and Toshiba.
Shares of Intel (INTC) rose almost 1 per cent on Thursday's [US] trading, to US$33.25. The job cuts and revised forecast were announced after the US financial markets closed. In after-hours trading, Intel's stock had moved 5.91 per cent lower at the time of this report.