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May 30, 2017

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Intel to cut staff in face of stagnant earnings

SAN FRANCISCO--U.S. chip giant Intel said Friday it will trim its workforce by five percent this year as it shifts from personal computers to powering mobile gadgets.

Word of the job cuts came a day after Intel reported that its net profit last year sank 13 percent but that the troubled personal computer market appeared to be stabilizing.

Intel shares remained around the closing price of US$25.85 in after-market trade.

"We do expect employment to come down by about five percent by the end of the year," Intel spokesman Chris Kraeuter told AFP.

"It is something we regularly do to make sure that the people we have match up with our priorities."

Kraeuter said California-based Intel ended last year with 107,600 workers. He declined to disclose which positions or locations would be targeted for cuts.

Trimming workforce could include simply not filling positions as people quit or retire, according to Kraeuter, who noted that the annual attrition rate at Intel is nearly four percent.

He contended "it would be wrong to conclude this is a layoff."

Intel reported on Thursday it made a net profit of US$9.6 billion on revenue of US$52.7 billion last year as compared with US$11 billion in net profit on US$53.3 billion in revenue in 2012.

"We had a solid fourth quarter with signs of stabilization in the PC segment and financial growth from a year ago," said Intel chief executive Brian Krzanich.

In the final quarter of the year, Intel posted profit of US$2.6 billion on revenue of US$13.8 billion as compared with US$2.5 billion net income on US$13.5 billion in revenue during the same period in 2012.

"We've built a strong foundation for our business by bringing innovation to the market more quickly across a wide range of computing platforms," said Krzanich.

"For example, at CES, we demonstrated multiple devices that weren't on our roadmap six months ago," referring to the Consumer Electronics Show gadget extravaganza in Las Vegas last week.

Krzanich said at the event Intel would produce on its own or with partners a range of products from a health monitor integrated into baby clothes to a heart monitor in earbuds.

He showed the company's new "personal assistant" dubbed Jarvis, which is Intel's answer to the voice-activated Google Now and Apple's Siri.

Intel will be producing a smartwatch with "geofencing" which allows families to get alerts if children or elderly parents leave a specific geographic area.

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