2,000 More Heads to Roll at Intel in Q4

Intel lowered its head count by some 2,000 employees in the third quarter and will lay off 2,000 more in Q4, the chip giant announced in its Q3 2007 earnings call Tuesday.

The head count reduction portion of Intel's multi-year restructuring plan is ahead of the pace the Santa Clara, Calif.-based company had set for itself, said outgoing CFO Andy Bryant, who will be replaced Assistant CFO Stacy Smith.

"The head count is lower than we initially planned. We think we're essentially a little ahead in terms of head count reduction," said Bryant, who will assume the post of Chief Administration Officer and remain in a position of authority over the CFO position.

Intel currently has some 88,000 employees. The company posted $10.1 billion in revenue in the third quarter, a 16 percent increase over Q2 and a 15 percent jump over Q3 2006. Net income was $1.9 billion for the quarter, representing 46 percent and 43 percent increases over Q2 2007 and Q3 2006, respectively.

Gross margin for the quarter was up 52.4 percent, up from 46.9 percent in the second quarter, making good Intel's pledge in its Q2 earnings call to get that number back up over the magic 50 percent mark that market watchers tend to place a great deal of importance on.

Driving Intel's gross margin gains were higher microprocessor volumes, lower 45nm start-up costs and lower microprocessor unit costs, the chip leader reported.

In addition, CEO Paul Otellini singled out demand for Intel's vPro platform as an indicator of the chipmaker's success at meeting the needs of business customers and the reseller channel. The vPro platform for desktops and notebooks is popular with in-house IT managers and managed service providers alike for its below-the-OS remote management tools built into the hardware and firmware of systems running in business environments.

"VPro is ramping extremely well. In chipsets, we had a record unit [shipment] and revenue quarter. This reflects the unique value of our platform strategy," said Otellini.