Intel to Close 2 Plants, Lay Off 900 Workers : Cutbacks to Effect Workers in 3 States

Intel Corp. on Monday announced it will lay off nearly 900 workers when it closes two plants in California and cuts back operations at computer-products facilities in Oregon and Arizona over the next few months.

About 500 workers will be laid off at manufacturing operations in Hillsboro, Ore., and another 100 layoffs have been ordered at a plant in Phoenix.

Intel will also shut down its component-test plant in Santa Cruz within four months, putting 240 people out of work. A component- assembly plant with 75 employees in Santa Clara also will be phased out over the next six months.

The company believes both the California facilities are too small to be cost effective.

“For the past 10 years, we have been able to avoid layoffs when we re-aligned operations because we were able to place excess people into other Intel operations,” said Gordon E. Moore, chairman and chief executive. “Given the state of our business at present, however, there is no prospect of absorbing 900 more people in a reasonable amount of time.”

Moore said a big factor influencing the layoffs was that the growth of Intel’s system’s business had failed to keep pace with the firm’s original predictions.

“The result is that we have created a manufacturing operation too large for our current level of business,” he said. “Our components operations have been hurt by a sharp drop in demand caused by a major inventory correction under way among our customers, especially those in office automation.”