SWOPblogger

The following article from NM Biz Weekly reports Intel's Rio Rancho plant will be affected by company-wide layoffs. The article also mentions clawbacks, which SWOP pushed for during the last round of tax breaks Intel squeezed out of Sandoval County. Today's Journal's article can be seen here.

Rio Rancho's major employer, Intel Corp., will see layoffs at its facility after all.

That was the official word Thursday afternoon from the computer chip manufacturer that employs about 5,600 in the community northwest of Albuquerque, just hours after the Sunnyvale, Calif.-headquartered company announced it would be downsizing its managerial ranks worldwide by about 1,000 positions.

While it is still unclear exactly how many workers will be affected in Rio Rancho, Intel's spokeswoman there, Liz Shipley, said "it will have an impact on the New Mexico site."

The average salary at the local plant is about $50,000 per year, one of the highest in the region.

In June, the company announced it was embarking on a comprehensive efficiency review to slash $1 billion in costs, after its revenues fell from $2.15 billion in the first quarter of 2005 to $1.34 billion for Q1 2006, a 38 percent decline year-to-year, according to company financial statements. Some analysts had predicted the cuts could result in layoffs or downsizing at the company.

Intel corporate spokesman Chuck Mulloy has maintained all along that cuts in operating costs do not equal a smaller workforce or company. Mulloy said Intel (Nasdaq:INTC) has shifted from manufacturing 200 mm chips to the 300 mm chips, which cost less to produce and don't require as much manpower.

The 300 mm chip also is cutting-edge technology that Intel's most direct competitor, Advanced Micro Devices Inc. (AMD) has, until now, dominated.

Computer manufacturer Dell Inc. (Nasdaq:DELL) recently signed a deal with AMD (NYSE:AMD) to use its chips in its high-end line of servers. Dell sells more systems globally than any computer company. The Austin, Texas-based firm's revenue for the past four quarters totaled $56.7 billion.

The last time Intel's Rio Rancho facility laid off workers was in the 1980s, when the company switched from making memory chips to microprocessor chips.

Last year, Sandoval County issued $20 billion worth of Industrial Revenue Bonds to Intel to provide it with tax relief while it was expanding its Rio Rancho facilities. A clawback attached to the bonds requires that Intel maintain its current workforce population. There's no word on whether the IRBs might be reduced or withdrawn by the county.

Intel
Layoffs
technology
AMD
New Mexico