PETER BURKE, the Minister for Enterprise, Tourism and Employment, has said it is an 'anxious time' for Intel's Irish employees amid the threat of potential job cuts.
Bloomberg reported this week that the chipmaker, which employs 4,900 people in Ireland, plans to cut around 20 per cent of its global workforce — around 21,000 staff.
However, Mr Burke said he hoped Ireland's relationship with Intel, which saw the opening of a €17bn plant in Leixlip less than two years ago, can be central the company's recovery.
The Co. Kildare town has been the base for Intel's European manufacturing operations since 1989.
Only last August, Intel said it planned to cut 15,000 staff as part of a plan to deliver $10bn in cost savings.
Recently-appointed Intel CEO Lip-Bu Tan said 'painful decisions' would have to be made to put the company on a solid footing for the future (Image: Intel)In an email to employees on Thursday, recently-appointed CEO Lip-Bu Tan said its first quarter results for this year were 'a step in the right direction'.
However, he said that Intel's current cost structure is still well above competitive benchmarks and 'painful decisions' would have to be made if Intel wanted to reposition itself as the world's most innovative company.
Mr Tan did not cite figures but said plans to remove organisational complexity by reducing the size of teams would inevitably result in staff cuts.
"There is no way around the fact that these critical changes will reduce the size of our workforce," he said.
"As I said when I joined, we need to make some very hard decisions to put our company on a solid footing for the future.
"This will begin in Q2 and we will move as quickly as possible over the next several months."
'Thoughts remain with staff'
Speaking on Friday, Mr Burke said despite the uncertainty, he drew confidence from Ireland being the hub of Intel's core business of semiconductor manufacturing.
"While no specifics around the number or location of job cuts were flagged, the company have said they plan to reduce operating costs by $500m this year and $1bn next year, and stated this will include a reduction in the workforce, particularly in management and non-core engineering roles," he said.
"It is likely to be several weeks before detail is available on the impact of these cost reduction measures.
"While we await further specifics on potential downsizing, which is an incredibly anxious time for Intel's staff, it is positive that the company have stated that they will continue to focus investment on their core business, the manufacturing of semiconductor products.
"This is the primary activity in Ireland.
Minister Peter Burke drew confidence from Ireland being the hub of Intel’s core business (Image: Leah Farrell / RollingNews.ie)"It is also worth noting that Intel has completed the construction of the most advanced semiconductor manufacturing facility in Europe in Fab 34, which is now in production in Leixlip and can be central to Intel's growth recovery strategy.
"This €17bn investment is just the latest in Intel's 35-year history operating here, with the Irish government, through IDA Ireland, partnering with Intel on this journey.
"My thoughts remain with staff and their families, many of whom are extremely concerned.
"I continue to keep in touch with local management and I am meeting them again next week.
"Government continues to value our long-term partnership with Intel and will continue to work with the company as it works through its plans over the coming weeks and months, as demand for semiconductors remains strong."
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