The Axe Falls At Intel; Manufacturing Job Cuts Spared Until Next Year

Intel announced restructuring plans Tuesday, including the cutting of 10,500 jobs, following an analysis of the company's structure and efficiency.

The plan is to eliminate "organizational redundancies and improved design methods and processes,” according to a statement released by the company.

Most job reductions in 2006 will occur in management, marketing and IT functions. In 2007, the reductions will be more broadly based to include manufacturing.

The company expects to save approximately $2 billion in 2007 in costs and operating expenses. In 2008 the company expects savings to grow to approximately $3 billion annually.

The company expects severance costs to total approximately $200 million.

The earnings release for the third quarter of this year is scheduled for publication Oct. 17.