Intel planning to cut about 5,000 jobs amid lukewarm sales

A day after predicting its sales this year would be “approximately flat,” Santa Clara chipmaker Intel said it planned to cut about 5,000 jobs over the next 12 months.

Intel spokesman Chris Kraeuter on Friday said it expects to trim its ranks worldwide by 5 percent by the end of 2014.  It currently has 107,000 employees, so a five percent cut would amount to 5,350 jobs.

Kraeuter said the company wasn’t disclosing where the job cuts would occur or provide other details about them, but added that “we’re realigning and refocusing our resources” in response to the evolving chip market.

Following its earnings announcement on Thursday,  Intel’s stock price was down more than 3 percent in early trading. While some analysts expressed concern about Intel’s business in notes to their clients, none seemed to be panicking.

Commenting that its datacenter chip sales were “disturbingly weak” during the fourth quarter, the analysts at Bernstein Research said they were “puzzled why the company continued to sound bullish” about that business as recently as November.

Still, many analysts said they saw no reason to change their ratings on Intel’s stock prospects. The experts at FBR Capital Markets & Co. said they even think the company’s shares “may work higher” in the near future, because the slump in sales of personal computers — which use Intel’s chips — may be easing.

Photo by Len Lehman, Mercury News

Steve Johnson Steve Johnson (261 Posts)

Steve Johnson covers the microchip industry, cyber security and the big-technology sector that includes Hewlett-Packard, Oracle and Cisco Systems.