Intel redundancy to be capped at two years’ pay

Intel redundancy payments to Irish staff will be capped at two years' salary under the chipmaker's drive to cut 12,000 jobs globally amid declining demand for personal computers.

Managers at Intel’s three Irish locations continued holding one-on-one meetings with employees yesterday, amid indications the group may be prepared to cut between 350 and 400 positions here.

The Irish Times reported yesterday that workers availing of the redundancy can expect to receive the equivalent of five weeks' salary for every year of service on top of a statutory entitlement to two weeks' pay.

Voluntary basis

It has emerged that departing employees will not receive any more than two years’ salary. Intel is planning on the basis that most of the redundancies will be on a voluntary basis.

Intel has about 4,500 employees and about 700 long- term contract workers in Ireland, mainly in the chipmaker's largest site in Europe, outside Leixlip, Co Kildare. Some 250 people work at a research and development facility in Shannon, Co Clare, and a further 350 in Cork.

A spokeswoman for Intel and a spokesman for IDA Ireland both declined to comment on the process. The global redundancy program, affecting about 11 per cent of Intel’s workforce, is aimed at saving the group more than $1 billion (€870 million) in operating costs. It expects to achieve half of the proposed workforce reduction this year.

Second-quarter dip

Last month Intel accompanied news that its first-quarter revenues rose 7.2 per cent to $13.7 billion, to broadly meet market expectations, by saying its second quarter sales would dip to $13.5 billion. Analysts, on average, had been factoring in $14.5 billion of second-quarter sales.

The warning comes as the group moves its focus from the personal computer industry to cloud computing, which allows data to be stored and accessed online.

Last week, Intel chief executive Brian Krzanich said cloud computing, which allows businesses to build and operate vast amounts of software without setting up their own servers, is “the most important trend shaping the future of the smart, connected world – and thus Intel’s future”.