The planned workforce reduction, including 1,000 already announced, is likely to include a significant chunk from the company's 3,000-strong team in India, sources said.
The huge lay-off plan comes amid a sharp 57 per cent plunge in Intel's second-quarter net profit and concerns over market share loss to rival chipmaker Advanced Micro Devices.
The company said on Wednesday that its worldwide sales dropped 13 per cent in the June quarter, while its Asia Pacific sales dropped 14 per cent from the year-ago levels.
Intel CEO Paul Otellini said in an internal memo sent to employees last week, which is in possession of PTI, that the number of Intel managers was being reduced by about 1,000.
While the company has confirmed the elimination of 1,000 managers, its officials declined to comment on the extent of the planned downsizing affecting its India operations.
However, a company official in Bangalore told PTI that further details about the outcome of a 90-day efficiency review project, which has been termed as the driver behind the latest round of lay-offs, would be announced later this month.
Sources in the know said the company was contemplating further workforce reduction in the near future, while it had no immediate hiring plans in India as well.
When asked about the company's hiring plans, Intel's Asia-Pacific spokesperson Mark Miller said from Hong Kong,
"It is true that there are very few other job opportunities currently available, except for very few exceptions, but this is across the company and not specific to India."
Otellini had also mentioned in the memo that redeploying the skills of the outgoing managers was not a viable option as the company has "limited internal job opportunities."
The CEO said that "slow and ineffective decision, resulting, in part, from too many management layers" was a key problem that the company found in its efficiency analysis and the decision was aimed at addressing this issue.
"Only managers, ranging from senior to first-line are affected," he added. Meanwhile, the industry experts said that the eventual job cuts could be huge, as the already announced layoffs were for the managerial positions.
Semiconductor industry analyst Eric Ross at the US-based equity research firm ThinkEquity Partners said that Intel might lay off as many as 10,000 employees in order to improve its markets. "Intel is not as profitable as it once was, and times are looking tougher in the immediate future," Ross said.
Another industry analyst at equity research firm American Technology Research, Doug Freedman, said that a series of additional lay-offs was likely that might reduce the company's 100,000-strong workforce by 10,000-15,000 employees.
The company had announced a 90-day internal business review project after announcing a disappointing set of first quarter results earlier in April. Otellini had said then that the result of the review would be a "leaner, more agile and more efficient company."
Intel's share price has dropped nearly 36 per cent over the past one year resulting in total market capitalisation loss of over $60 billion, while rival AMD's shares has gained nearly four per cent in the same period.
Intel has been the worst performer on the 30-share benchmark Dow Jones Industrial Average index with a decline of nearly 26 per cent in its share price so far this year.
Otellini indicated that the current set of lay-offs may not spell the end of job reductions or other restructuring actions.
He added: "It's an essential first step toward making us more competitive. Over the last five years at Intel, the number of managers has grown faster than our overall employee population. Our efficiency analysis and industry benchmarking have shown that we have too many management layers, top to bottom, to be effective."
Meanwhile, Intel reached an agreement last month to sell its XScale application processor line to Marvell Technology Group for $600 million and the deal would also involve the transfer of most of the 1,400 employees, who work on the product, to Marvell.