Intel staff in Kildare told to consider taking unpaid leave amid cost-cutting

Manufacturing staff at Intel in Kildare have been told to consider taking unpaid leave as the chip-making company seeks to cut back dramatically on costs.

About 4,500 of its Irish workforce are based at its Leixlip plant in Co Kildare although it remains unclear how many will be required to take the temporary work breaks which are likely to extend to three months.

The move follows a slowdown in demand for the chip giant’s products. PC sales tumbled 15 per cent in the third quarter of this year, with HP, Dell and Lenovo, all of which use Intel’s processors, suffering steep declines.

In a statement on Thursday, Intel said the push for voluntary time off programmes would enable it to reduce short term costs and “offer employees attractive time off options”.

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“During our recent earnings call, we announced significant steps to reduce costs and improve efficiencies, while mindfully protecting the investments needed to accelerate our transformation and position us for long-term growth,” the company said.

“Retaining our manufacturing talent is a key element of positioning Intel for long-term growth.”

It is believed staff would be required to take up the leave periods by next March but the company has not commented on timelines, duration or what proportion of its Irish workforce would need to do so.

Intel’s original fab, or semiconductor factory, has been operating at Leixlip for about 30 years. Construction on the new Fab 34 began four years ago, an investment that will ultimately double production capacity.

Under plans earlier this year, jobs in Ireland were expected to rise to about 6,500. Intel expected to invest a further €12 billion in its Fab 34 facility between now and the end of 2023 in a move that would bring to €30 billion the total invested in the State since 1989.

However, fears about jobs at Intel’s Irish business have been building since late October when the chip giant said it needed to cut costs amid a persistent slump in computer demand that has dragged down its sales.

In an earnings call at that stage, the chip giant flagged reducing headcount and slowing spending on new plants that would save $3 billion (€2.9 billion) next year. These savings would rise to $10 billion per year by the end of 2025.

The State narrowly missed out in the spring on becoming home to two new large semiconductor factory sites to Magdeburg, Germany. In addition to the new German factories, Intel is also creating a new R&D and design hub in France, and announced manufacturing, foundry services and back-end production in Italy, Poland and Spain.

Chief executive Pat Gelsinger had been banking on a rapid rebound in semiconductor sales to help fund his ambitious plans to restore Intel to its former dominance in the $580 billion (€551 billion) industry.

Intel’s last big wave of lay-offs occurred in 2016, when it trimmed about 12,000 jobs, or 11 per cent of its total. The company has made smaller cuts since then and shuttered several divisions, including its cellular modem and drone units. – Additional reporting: Bloomberg