The tech-giant is reorganizing to confront a decline in sales of personal computers. The 12,000 jobs are about 11% of the company’s workforce.
The affected employees began receiving notice of the layoff on Monday. The termination date for the affected employees is May 31.
They will each receive six weeks of additional pay and three months of Intel paid COBRA premiums.
The chipmaker said the cuts will include “voluntary and involuntary departures” from its operations around the world. The cuts will provide about $1.4 billion in annual savings by the time the cuts are completed next year.
Oregon Employment Department analyst Christian Kaylor told KOIN that the cuts are a small dent in what’s been a very strong economic stretch for the tech industry.
“In the region I think they’ve created over 4,000 jobs since 2010,” Kaylor said. “This is a step back, but on average this is an industry that’s done pretty well in this economic recovery.”
May sew some new seeds
Economic and business consultant Bill Conerly said it’s always bad for people who are directly affected, “but for the broad Portland area this is really a drop in the bucket.”
Conerly told KOIN 6 News he thinks Intel’s pending layoffs will have minimal effect on the area’s economy.
In a recent article on Forbes.com, Conerly questions the company’s decision to cut 12,000 jobs worldwide in one massive layoff.
“They should’ve been trimming earlier and I can’t believe that there are thousands of people who really should’ve been there in January and shouldn’t be there in May,” he said.
He also thinks the layoffs may even sew some new seeds.
“We’ve seen that before. Talented people get laid off and they say, well, heck I’m going to start my own business,” Conerly said. “I can’t make any promises but I bet there’ll be a few startups.”
Intel is Oregon’s largest private employer, with 19,500 workers in Portland’s western suburbs.
The company, based in Santa Clara, California, is a leading supplier of computer chips, but PC sales have been declining steadily in recent years. It’s trying to focus on its most profitable lines of business, which include making processors for data center computers and Internet-connected gadgets.
KOIN 6 News reporters Trevor Ault and Tim Becker contributed to this report.
The Associated Press contributed to this report.