Exhibit 99.1
2200 Mission College Blvd.
P.O. Box 58119
Santa Clara, CA 95052-8119
CONTACTS: Chuck Mulloy Alex Lenke
Media Relations Investor Relations
408-765-3484 408-765-1773
chuck.mulloy@intel.com alex.lenke@intel.com
INTEL ANNOUNCES RESTRUCTURING
Expects to Reduce Costs and Operating Expenses
By $2 Billion in 2007, By $3 Billion in 2008
SANTA CLARA, Calif., Sept. 5, 2006 - Intel today announced plans
for restructuring following an analysis of the company's
structure and efficiency. 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.
The savings are a combination of non-workforce related steps
and a significant reduction in Intel's workforce. The company's
employee population will decline to approximately 95,000 by the
end of this year, resulting from workforce reductions, attrition
and previously announced actions. The workforce will decline to
approximately 92,000 by the middle of 2007 - 10,500 fewer than
the company's employee population at the end of the second
quarter of 2006. In addition to the savings from the workforce
reduction, the company expects savings in merchandizing 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, as well
as attrition. In 2007, the reductions will be more broadly based
as Intel improves labor 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 utilizing
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.
Intel is currently in its quiet period, so an update to its
business outlook will not be made at this time. Further
information concerning savings and costs related to the
restructuring project will be provided in quarterly earnings
releases and related business outlook estimates. The earnings
release for the third quarter of this year is scheduled for
publication Oct. 17.
Intel, the world leader in silicon innovation, develops
technologies, products and initiatives to continually advance how
people work and live. Additional information about Intel is
available at www.intel.com/pressroom.
This press release contains forward-looking statements that
involve risks, uncertainties and assumptions. Many factors could
affect the Efficiency Plan and the Corporation's actual results,
and if the risks or uncertainties ever materialize or the
assumptions prove incorrect, the results of the Corporation may
differ materially from those expressed or implied by such forward-
looking statements and assumptions. All statements other than
statements of historical fact are statements that could be deemed
forward-looking statements, including but not limited to any
projections, the extent or timing of cost savings, charges, use
of cost savings, revenue or profitability improvements, or other
financial items; any statements of the plans, strategies, and
objectives of management for future operations, including timing
and execution of any restructuring plans, retirement programs,
benefit program changes or reorganizations and extent of
employees impacted; any statements concerning the Corporation's
expected competitive position or performance; any statements of
expectation or belief; and any statements of assumptions
underlying any of the foregoing. Intel presently considers the
factors set forth below to be the important factors that could
cause actual results to differ materially from the Corporation's
published expectations: risks, uncertainties and assumptions
including the timing and execution of plans and programs subject
to local labor law requirements, including consultation with
appropriate works councils; assumptions related to severance and
post-retirement costs; future acquisitions, dispositions,
investments, new business initiatives and changes in product
roadmap, development and manufacturing which may affect expense
and employment levels at the Corporation; assumptions relating to
product demand and the business environment; and other risk
factors that are described from time to time in the Corporation's
Securities and Exchange Commission reports, including but not
limited to the risk factors described in the Corporation's
Quarterly Report on Form 10-Q for the fiscal quarter ended July
1, 2006, and other reports filed after the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 2005.
The
Corporation assumes no obligation to update these forward-looking
statements.
Intel and the Intel logo are trademarks or registered trademarks
of Intel Corporation or its subsidiaries in the United States and
other countries. *Other names and brands may be claimed as the
property of others.