March 9, 2001–Santa Clara, California–Intel Corp. yesterday lowered its revenue outlook for the first quarter of 2001 and announced plans to reduce its workforce by 5,000. Intel now predicts that revenue for the first quarter will be down approximately 25% from its fourth quarter 2000 revenue of $8.7 billion.
The company expects spending in the quarter, excluding in-process R&D, to be down approximately 15% from its fourth quarter expenses of $2.4 billion, primarily due to lower revenue and profit-dependent expenses and the impact of cost-cutting measures.
“While slashing nonessential spending across the company, we are protecting investments we believe will make Intel more competitive,” says Andy D. Bryant, Intel executive vice president, chief financial and enterprise services officer. “Our R&D spending for 2001 has been revised only slightly–now forecast at $4.2 billion, down from the previous expectation of $4.3 billion, but still up from $3.9 billion in 2000. The reduced R&D expenditure is a result of cuts in discretionary spending, not the result of program cuts. Intel’s capital spending budget for 2001 is unchanged at $7.5 billion. This will be used to expand production and implement new technologies such as ramping the Pentium 4; getting market segment share in chipsets; implementing the 0.13-micron process, which will enable more processors at higher levels of performance and lower costs; and preparing for production of 300mm wafers, which will make possible unit die cost reductions of 30% starting in 2002.”
Intel’s workforce reduction is expected to take place during the next 9 months.