|WIRE: 02/20/2001 3:29 pm ET
ABC News WIRE: 02/20/2001 3:29 pm ET
Intel Curtails Hiring, Defers Some Raises
SAN FRANCISCO (Reuters) - Intel Corp. (NasdaqNM:INTC - news) is tightening its belt further, instituting cost cuts that the world's largest chipmaker said on Tuesday should help it save "several hundred million dollars" this year, a company spokesman said.
Senior management's annual performance pay raise, usually given in April, will be deferred until October at the earliest, said Intel spokesman Chuck Mulloy. Regular salaried employees will receive half their performance pay raise in April.
Come October, Intel will reevaluate business conditions and decide then whether to pay the annual performance raises or to defer them further, Mulloy said.
Santa Clara, Calif.-based Intel will also cut discretionary spending, such as overtime, travel and consultancy work, but its capital expenditure budget of $7.5 billion and its research and development budget for 2001 are not affected, Mulloy said.
Intel will also limit hiring to only "key strategic technical and engineering hires," and hopes to trim the work force by the end of the year through attrition and the slowdown in hiring, Mulloy said, adding he did not know of a specific figure.
Also, Intel will defer its free-PC program until 2002 for salaried employees who have yet to receive a home computer. Hourly employees have the option to get their free PC now or to defer and wait for a more powerful one.
"The quarter's going to be what we thought it would be to the best of our knowledge right now," Mulloy said. "There is no change in guidance, no change in cap-ex, no change in R and D.
Intel employees were notified this morning of the additional cost-saving measures, Mulloy said.
Intel shares fell $2-1/4, or 6.7 percent, to $32-1/8, in late-afternoon trading on Nasdaq