PRESENT POINT POWER

Intel an over gloated company that thinks the sun never sets is facing serious competition from its rival AMD. And the only way to stay viable is to cut the workforce to reduce cost and allow the stocks to rise again. This has been the business plan adopted everywhere to keep afloat at least. There are of course some companies that cannot even manage to stay afloat but to go bust.

Companies exist for investors and shareholders and this VSS is always welcome news by them as the shares have already climbed after the announcement was made.

No matter how well-heeled and organized a company is, it is not perfect as such a state does not exist. It is always in a state of being – growing or declining to changing circumstances. Nothing is stagnant and permanent.

It would indeed be a bad news for the Gerakan controlled Penang where the majority of Intel shedding would come. So until Wednesday, the exact figures would not be known.

The VSS must be very generous as all the 200 offered (mostly managers drawing fat salaries) in the 1^st round were taken up. And majority can retired if they do not need to get another job.

And for the coming round involving lower ranking staff, the ONLY way to go is across the causeway (see report below, where sale of Bikes are Soaring). The government over here is more interested in grabbing wealth than creating them for all to share.

Latest report from
STAR, Monday September 4, 2006

Intel Malaysia to slash 2,000 jobs in VSS exercise; By DAVID TAN

PENANG: Intel Malaysia is implementing a second voluntary separation scheme (VSS) on Wednesday which is expected to involve between 1,000 and 2,000 employees in the country.

The exercise is part of Intel’s worldwide VSS scheme said to involve between 10,000 and 20,000 workers. It is also the second VSS offered to employees within two months, the first being on July 13. The multinational now employs about 100,000 workers worldwide compared to 80,000 three years ago.

In Malaysia, Intel has over 6,500 workers in Penang, about 3,500 in Kulim, and about 200 in Cyberjaya.Intel sources said a worldwide e-mail memorandum on the forthcoming VSS exercise was issued on Thursday in the United States by top management to all its employees.

The memorandum stated that Intel chief executive officer Paul S. Otellini would speak to employees worldwide via video conferencing this Wednesday, to give details on the VSS and the number of employees affected.In April, the world’s largest chipmaker had forecast a significant decline in profits this year, saying it would reduce expenditure by about US$1bil (RM3.7bil).

The company had faced stiff competition from rival chipmaker, Advanced Micro Devices Inc, which gained a larger market share, particularly in the server segment.On July 13, Intel implemented its first round of VSS which affected about 1,000 workers worldwide, including some 200 in Malaysia.

Otellini had then said the VSS measure was necessary as the company's efficiency analysis revealed slow and ineffective decision-making. While the first exercise had involved mostly managers, the coming VSS is expected to cover employees at all levels.

Intel sources said that some employees in the human resources, purchasing, and logistics departments of Intel Malaysia had already received their VSS offers. They were offered 1.5 months salary for each year of service and three months pay for leaving on short notice.

In the first round, Intel Malaysia offered the VSS scheme to over 200 workers, comprising mainly managers, who all took up the offer. No one from Intel Malaysia's public relations department was available for comment.

Intel to shed 20,000 jobs; stock jumps
With AMD hot on its heels, chipmaker prepares for battle

Jessica Guynn, Chronicle Staff Writer; Saturday, September 2, 2006

It will be a long holiday weekend for about 100,000 Intel Corp. employees, with the world's largest chipmaker -- facing tough competition from chief rival Advanced Micro Devices Inc. -- expected to announce as many as 20,000 job cuts next week, its largest retrenchment in two decades.

Chief Executive Officer Paul Otellini, who already has begun to slash jobs and sell businesses in response to falling sales and market share, is expected to discuss with employees the results of a 90-day stem-to-stern review of company operations on Tuesday via Webcast.

Intel has about 6,000 employees in its Santa Clara headquarters and about 7,000 in Folsom (Sacramento County). Other large operations include about 17,000 employees in Oregon and 11,000 in Arizona.

"We are not commenting on specific timing of that report nor are we commenting on the speculation about what the report will say," Intel spokesman Chuck Mullo said.

For Intel, the problem is definitely inside, analysts say.

The company has added more than 20,000 employees since 2003, said Morgan Stanley's Mark Edelstone, who is predicting that between 15,000 and 20,000 jobs will disappear. Intel is an investment banking client of Morgan Stanley.

"This is a take-no-prisoners attitude," said Martin Reynolds, a Gartner Group analyst who estimates that cutting 20,000 jobs could reap net savings of $4 billion a year. "You don't get to do this kind of thing too often in a company. So when you do it, you do it hard."

Such large-scale layoffs will buoy Wall Street. Shares of Intel rose 31 cents to $19.88 on Friday, their highest close since May 9. "Investors will look very favorably on that kind of financial improvement," Reynolds said.

More critically, Intel's dominance of the chip market hangs in the balance. Intel must take major steps to lower costs and increase efficiency as smaller rival AMD gains ground in servers and personal computers, analysts say."Intel is under pretty significant attack," Edelstone said. "They have to be as ... ready to do battle as they possibly can."

It's a new and uncomfortable position for the longtime market leader, which reported its biggest profit drop in more than four years in the second quarter and said it is unlikely to meet its 2006 sales forecast.

"Intel has been out there at the tip of the arrow for literally decades, setting the drumbeat for the industry to march to," IDC analyst Crawford del Prete said. "Now it faces an incredibly competitive environment."

Intel already has taken steps to lower costs -- steps analysts have included in their job loss projections. The company fired 1,000 managers in July, the deepest cuts in four years. It also sold two business units, which employ about 2,000 people. In addition, Intel can count on annual attrition of 5,000 to 6,000 workers, Edelstone estimates.

Otellini told financial analysts in April that he planned to restructure the company to shed weak businesses and cut manufacturing costs. Sharp reductions in the company's marketing staff are also expected.

Analysts are betting on a wave of promising new products rolled out this summer and a sharp focus on the core chip business to stanch market share losses.

"As the company grew, it developed a lot of inefficiencies. It's trying to learn how to become an efficient big company," said David Wu of Global Crown Capital. Wu owns shares of Intel and is advising investors to buy the company's stock because he expects new products will bring back market share.

"Intel is like a middle-aged person whose doctor tells him to exercise and diet. First and foremost, Intel needs to focus on products, and that's exercise. Secondly, Intel has to get slimmer, so that's the diet and that means fewer employees."

10,000 may lose jobs as Intel tries to slash $1 billion in costs

By Ian King; Bloomberg News

Intel Chief Executive Officer Paul Otellini may cut at least 10,000 jobs next week, or about 10 percent of the chipmaker's work force, in his efforts to slash $1 billion in costs this year.

Otellini will discuss the results of a 90-day internal review with employees Sept. 5, said Patrick Ward, a spokesman for Intel. In an interview Friday, Ward called reports on job cuts "speculation." Mark Edelstone at Morgan Stanley is among analysts who predict at least 10,000 reductions.

Intel, the world's biggest semiconductor maker, is wrapping up its most sweeping overhaul since the 1980s as Otellini battles market-share losses and falling sales. He decided to fire 1,000 managers in July to restore profit growth, marking the biggest cuts at the company in four years.

"It would be seen as lame if Intel does less than 10,000," said David Wu, an analyst at Global Crown Capital in San Francisco. He rates the stock "overweight" and owns shares. Wu is advising investors to buy Intel's stock because he expects recently introduced products will help recapture market share.

Otellini, 55, is eliminating jobs and selling businesses after forecasting the first annual sales drop in five years. While Intel tried to create new markets for its personal-computer microprocessors, the company's closest competitor gained ground. Advanced Micro Devices, based in Sunnyvale, Calif., now has more than 20 percent of the market for chips that power PCs.

Intel ended the second quarter with 102,500 employees. That doesn't include the 1,000 management reductions in July, and the announced sale of two communications units that will shave 2,000 more people from the payroll by then end of the year.

"You're probably going to see them go back to the core business, the company they were three or four years ago," said Chris Caso, an analyst at Friedman Billings Ramsey in New York. He raised his rating on Intel this week to "strong buy."

To win back sales, Intel this week introduced a version of its Xeon server chip five months ahead of schedule. Otellini has accelerated the introduction of products and says his Xeon chips are faster and more efficient that Advanced Micro's Opteron.

In the second quarter, Intel reported its biggest profit drop in more than four years and said it is unlikely to meet its 2006 sales forecast. Revenue will probably decline more than the 3 percent Intel forecast in April, the company said last month.

More job reductions may reverse a hiring binge that has added more than 20,000 employees since 2003, according to Morgan Stanley's Edelstone, who is based in San Francisco. He predicts 15,000 to 20,000 cuts including previously announced reductions.

"Ten thousand would be at the low end of everyone's expectations," said Doug Freedman, an analyst at American Technology Research in San Francisco who has a "buy" rating on Intel's shares and doesn't own any.

Intel cuts would be the latest in the Silicon Valley area of California near San Francisco, home to many U.S. technology companies. In May, computer-server maker Sun Microsystems said it would cut 13 percent of its work force, or 5,000 jobs. A year ago, Hewlett-Packard, the world's second-largest personal-computer maker, said it is cutting 14,500 jobs.

Intel plan may involve mass layoffs

By Laurie J. Flynn The New York Times

Published: September 1, 2006;SAN FRANCISCO

Executives of Intel, the world's largest chip maker, are expected to reveal on Tuesday the results of a sweeping evaluation of the company's internal operations that could include the layoff of thousands of employees.

The moves would be the culmination of what Paul Otellini, the Intel chief executive, promised in April would be a broad review of operations to reduce costs and increase efficiency, after Intel's announcement of disappointing financial results.

Otellini told Intel employees in an e- mail message sent Thursday that he would announce the results of the study to workers via a company Webcast on Tuesday, according to an Intel employee who requested anonymity.

Referring to Intel's promise that it would announce results of the study by the end of September, Chuck Mulloy, a spokesman for Intel, said: "We said that we intend to disclose the results of the structure and efficiency study during the quarter and we're on track to do that."

Mulloy declined to provide details or comment on the possibility of layoffs.

In April, Otellini told a meeting of financial analysts that the company would restructure to focus on reducing manufacturing costs and identifying weak business units. "You will see a leaner, more agile and more efficient Intel," Otellini told analysts at the time. Wall Street analysts have been eager to see Intel reduce costs, and most have expected Intel to announce layoffs this autumn.

Nathan Brookwood, a technology consultant, said he expected Intel to reduce its work force drastically, perhaps by eliminating redundant projects.

In July, Intel announced plans to sell parts of its communications business and to lay off 1,000 managers. Intel, based in Santa Clara, California, has about 100,000 employees.

Bike sales surge as more locals work in Singapore

04 Sep 2006

JOHOR BARU: Motorcycle dealers in Johor have plenty to smile about with sales surging as more Malaysians find jobs across the Causeway due to the robust economic growth in Singapore.

The Johor Baru Motorcycle and Scooter Dealers Association said a total of 30,700 motorcycles were sold in Johor in the first five months of the year. This is 5,000 more than the corresponding period last year. The association’s public relations officer, H.K. Lai said motorcycle sales in Johor had seen an upsurge since 1999 with an average of 35,000 new motorcycles registered annually over the past eight years.

"We expect sales this year to reach 70,000," he said, adding that the optimism is based on the more than 50,000 Malaysians workers who commute to Singapore daily. "A majority of those who work in Singapore prefer to enter the republic on motorcycles because the Vehicle Entry Permit (VEP) for a car is S$30 (RM69.80) a day compared to S$4 (RM9.30) per day for motorcycle," he said.

VEPs can also be purchased on a monthly basis at S$600 (RM1,396) for cars and S$80 (RM186.20) for motorcycles. Motorcycle workshops are also reaping the benefits. The need for repair and maintenance has encouraged the setting up of workshops along access roads to the Causeway including Jalan Wong Ah Fook, Jalan Tebrau and Jalan Skudai.

"These workshops open round-the-clock to cater to their customers who are workers in Singapore’s factories and shipyards," Lai said.