Intel has announced that it would lay off 10,500 workers worldwide, out of a total staff strength of 99,000 employees.
However, the world's largest PC chipmaker Intel is committed to India and plans to invest over $1 billion in the country, the 10,500 global job cuts on Tuesday notwithstanding.
A company spokesperson in India said Intel remains committed to India and that the announcement does not in any way change Intel's plans for the country.
Plans announced by Craig Barrett, chairman of Intel, in December 2005, remain and the restructuring exercise would not affect these plans, the spokesperson said.
However, Intel declined to announce the break-out impact of the proposed job cuts affecting its Indian workforce.
As most of the company's functional areas, business units and capabilities span across multiple sites and the process has just begun, it was early to reach the break-out impact by site, the spokesperson said.
The move to cut more than a tenth of its workforce is aimed at streamlining its operations in the wake of tough competition in the computer chip market.
As a result of the restructuring, the company expects to generate savings in costs and operating expenses of approximately $2 billion in 2007.
In 2008 the company expects savings from this restructuring to grow to approximately $3 billion annually, an Intel release said.
In addition to the savings from the workforce reduction, the company expects savings in merchandising expenses, capital and materials.
"These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come," said Paul Otellini, Intel president and chief executive officer.
Most job reductions this year will occur in management, marketing and information technology functions, reductions related to the previously announced sale of businesses, and attrition.
In 2007, the reductions will be more broadly based as Intel improves labour efficiency in manufacturing, improves equipment utilization, eliminates organizational redundancies, and improves product design methods and processes.
In 2008, the company expects the cost and operating expense savings from this restructuring to grow to approximately $3 billion as it achieves the full-year run rate on the projects implemented in 2007.
In addition, Intel expects to achieve a capital expenditure avoidance of $1 billion by better utilising manufacturing equipment and space.
The company expects that approximately 25 percent of the project's savings in 2007 will reduce cost of sales, and the rest will reduce operating expenses.
The company expects severance costs to total approximately $200 million, offsetting some of the expected savings from the project's implementation.
With inputs from Business Standard