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Intel cuts US$1billion from spending budget

Intel is planning to slash US$1 billion in spending from its budget for this year as the company embarks on its biggest ever cost-cutting review following disappointing financial results for Q1.

Intel is planning to slash US$1 billion in spending from its budget for this year as the company embarks on its biggest ever cost-cutting review following disappointing financial results for Q1.

Intel CEO Paul Otellini announced the news during a conference call this month after seeing his company’s profit fall to US$1.35 billion in the first quarter of 2006 compared with US$2.18 billion in the same period last year, a drop of 38%.

“We are just undertaking a look at the company now in a fairly comprehensive fashion,” Otellini said during the conference call on April 19.

“The idea would be to look at every aspect of our operations from capital efficiency to our facilities, to our resourcing, to our various business units, to under performing businesses, and so on,” he continued.

“This is a wholesale look at the company over the next couple of months to take a look at where we want to be for 2007 and beyond,” Otellini added.

Intel CFO Andy Bryant said the firm could meet the US$1 billion savings target without laying off staff, but it would mean a headcount reduction and tighter control over spending.

The news has raised fears of cutbacks across the chipmaker’s global organisation. Intel Middle East declined to comment on the issue.

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