Here’s why Intel’s CEO says they’re laying off 12,000 people

[RDS]

There is a price to pay for innovation.
Here's why Intel's CEO says they're laying off 12,000 people - Business Insider

 

[RDS]

Thanks to capitalism. You made billions for them. Then they tell you "you can FO now".

 

[Kal'Stang]

Thanks to capitalism. You made billions for them. Then they tell you "you can FO now".

All large companies go through this type of thing. It's how they stay in business. Even smaller companies have to do this on occasion. Like you said, its the price of innovation. Times change and companies must change with it. What would you rather have? Them not restructuring and as such not able to keep up with what they need to do thereby ending up going bankrupt in the long run which means byebye company and ALL jobs lost or restructure and able to keep up with the times with not everyone losing their jobs?

 

[RDS]

All large companies go through this type of thing. It's how they stay in business. Even smaller companies have to do this on occasion. Like you said, its the price of innovation. Times change and companies must change with it. What would you rather have? Them not restructuring and as such not able to keep up with what they need to do thereby ending up going bankrupt in the long run which means byebye company and ALL jobs lost or restructure and able to keep up with the times with not everyone losing their jobs?

Basically Intel did not keep pace with the rapid technological changes. If they had kept pace these workers could keep their jobs while retraining them for new innovative products.

 

[DA60]

Basically Intel did not keep pace with the rapid technological changes. If they had kept pace these workers could keep their jobs while retraining them for new innovative products.

If, if, if.

They are run by humans and humans make mistakes.

Look at all the bankers (including those at the Fed) and corporations that completely misread the housing boom/bust...it happens.

 

[David_N]

If, if, if.

They are run by humans and humans make mistakes.

Look at all the bankers (including those at the Fed) and corporations that completely misread the housing boom/bust...it happens.

Yeah, mainstream economists/models tend to ignore reality. Thank god for post Keynesians.

 

[Kal'Stang]

Basically Intel did not keep pace with the rapid technological changes. If they had kept pace these workers could keep their jobs while retraining them for new innovative products.

You act as if Intel purposely got behind the times. I doubt that is what happened. Somehow I can't see the board members saying "Hey! Let's not advance so that we can later restructure and lay off 12,000 people!". Crap happens. No one on this Earth is perfect.

 

[Mycroft]

Basically Intel did not keep pace with the rapid technological changes. If they had kept pace these workers could keep their jobs while retraining them for new innovative products.

Retraining costs money. If it is determined to be cheaper to lay off workers and hire workers able to deal with the company's new direction without that extra retraining cost, that can only be considered a good thing from a business point of view.

In any case, it doesn't appear to me that Intel "did not keep pace with rapid technological changes"...rather the company is charting their course based on technological changes and decisions about the company's focus.

 

[csbrown28]

If, if, if.

They are run by humans and humans make mistakes.

Look at all the bankers (including those at the Fed) and corporations that completely misread the housing boom/bust...it happens.

DA I curious how you feel about stock buybacks......I'm not sure how I feel, but whatever you come up with, I should probably take the opposite view....Haha....Just kidding. But seriously, Intel just bought back $800 million in shares in Q1 of 2016. This inflates the stock price, arguably , artificially.

Thoughts?

 

[RDS]

Retraining costs money. If it is determined to be cheaper to lay off workers and hire workers able to deal with the company's new direction without that extra retraining cost, that can only be considered a good thing from a business point of view.

In any case, it doesn't appear to me that Intel "did not keep pace with rapid technological changes"...rather the company is charting their course based on technological changes and decisions about the company's focus.

The PC market was dead 10 years ago.

 

[csbrown28]

Being in the business to sell servers, storage, networking and virtualization, seems to me Intel is in a dam good spot. memory, networking hard drives, even VMware (the virtualization) Intel has the least amount of competition. Memory and Hard drives are highly competitive. In the virtualization space, VMware has a few competitors, but Intel has few viable competitors that, even if another company could deliver CPU's of equal capability, few could reach the scale of a company like Intel for a long time. Ironically, it is virtualization that may be responsible for Intel's slide, as virtulization allows 70-90% increase of efficiency on the utilization of CPU resources, thus fewer CPU's are needed.

Just ranting out loud.

 

[csbrown28]

The PC market was dead 10 years ago.

Point?

 

[RDS]

Point?

That shows you did not read the story at the link.

 

[Mach]

The PC market was dead 10 years ago.

Therefore every employee tied to the PC division should have seen the writing on the wall. I mean, mr obvious right?

Most people, including executives, can succumb to momentum. Intel was THE juggernaut of PCs since forever. Changing that momentum is hard, so hard that most smaller companies don't even try. Same with employees, they tell themselves it may or may not happen but ride it to the end. Just like shareholders do, just like company management does.

 

[Mycroft]

The PC market was dead 10 years ago.

I have to disagree, considering all of Intel's innovations over the last 10 years that have led to better and better processors, among other things.

And then there's this:

http://www.cio.com/article/2375895/...-dead-not-at-dell-which-is-doubling-down.html


Now...if you say that the PC market isn't what it was 10 years ago, I would agree. Shifts to mobile computing are a fact of life even though mobile computing hasn't really affected PC use until after 2007/2008 when the iPhone and Android came around. It still has taken some time for mobile computing to affect PC sales.

 

[faithful_servant]

Thanks to capitalism. You made billions for them. Then they tell you "you can FO now".

So the market changed and Intel had to adjust to it. Should Intel just keep employing people who don't do anything for them?? Maybe set up some big facilities where they can go to every day and spend their days playing Mah Jong, dodgeball and Minecraft...

 

[Fearandloathing]

Basically Intel did not keep pace with the rapid technological changes. If they had kept pace these workers could keep their jobs while retraining them for new innovative products.

I love "if".

You know IF the Edsel had looked different, some 1,200 workers would have had jobs for years.

**** happens, they may have erred, but how many years experience have you had creating a business and building jobs. What you seem to be suggesting is they should be jailed or something for laying people off. Businesses DO NOT operate for the benefit of the workers, they work specifically for the shareholders, like all those union and municipal pension funds.

 

[Fearandloathing]

I love "if".

You know IF the Edsel had looked different, some 1,200 workers would have had jobs for years.

**** happens, they may have erred, but how many years experience have you had creating a business and building jobs. What you seem to be suggesting is they should be jailed or something for laying people off. Businesses DO NOT operate for the benefit of the workers, they work specifically for the shareholders, like all those union and municipal pension funds.

I'll bet every detractor in here saw this shift coming and would have prepared 10 years ago. The truth is the information/communications market is changing faster than all of your underwear. Intel sees the future now and is laying off in order to re-tool.

For those who so many objections to that, relations with Cuba are being restored, and you can go liver there...so those greedy corporate heads won't be made into demons when they are forced to change company to the times.

I'm surprised you're not all employed at buggy whip factories.

 

[DA60]

DA I curious how you feel about stock buybacks......I'm not sure how I feel, but whatever you come up with, I should probably take the opposite view....Haha....Just kidding. But seriously, Intel just bought back $800 million in shares in Q1 of 2016. This inflates the stock price, arguably , artificially.

Thoughts?

Lol

Stock buyback are a huge portion of why this current stock market boom has lasted as long as it has (though it's been more or less flat for 18-24 months).
Sales are moderate-flat but interest rates are record low so there is cheap money everywhere. Then why not artificially inflate profits by taking out huge loans at near nothing rates and buyback the stock? This inflates the price, which makes the company worth more and makes the profits seem better...plus, the company owns a higher percentage of itself.
Basically, stock buybacks have been covering corporate weakness for several years now...which is largely why the middle class is shrinking, home ownership rates have been (overall) dropping and food stamp usage is still WAY higher then when the Great Recession began...yet the stock market has flourished (more or less).
The Federal Reserve has given a near endless amount of cheap debt to keep the party going for it's corporate buddies.