Intel to Cut Thousands of Jobs

• CEO Gelsinger embarks on ambitious effort to regain share

• Chipmaker is spending on research, development and new plants

Intel Corp. plans to eliminate thousands of jobs to reduce costs and fund an ambitious effort to rebound from an earnings slump and market share losses.

The workforce reduction may be announced as early as this week, according to people familiar with the company’s plans, who asked not to be identified because the information isn’t public. Intel, which is scheduled to report second-quarter earnings Thursday, has about 110,000 employees, excluding workers at units that are being spun out.

Intel Plans to Cut 5,000 Jobs in 2014

Intel expects to shed about 5 percent of its work force, or 5,000 jobs, in 2014, as it tries to change the company with the times, according to a company official.

The official, who spoke only anonymously, said the cuts would probably be made through a mixture of attrition and layoffs.

Intel, the world’s largest maker of semiconductors, rode to greatness by supplying crucial elements of personal computers, but it failed to anticipate the ways that smartphones and tablets would start to replace PCs.

Brian M. Krzanich, who became chief executive of Intel in mid-2013, has said that Intel has realized its mistake. He has been in a hurry to show how Intel’s newest chips could be part of wearable computers, biometric devices and even connected appliances.

Intel is also trying to make low-power chips that can compete in tablets and smartphones and to push new versions of chips for PCs. Those chips for PCs remain critical for Intel. In earnings announced on Thursday, the company said its PC division had $33 billion in revenue in 2013. While that number was down 4 percent from 2012, it was still nearly two-thirds of Intel’s annual revenue of $52.7 billion.

Intel also projected that its revenue for all of 2014 would be flat and that gross profit margins could shrink. Research and development spending was also expected to stabilize despite the pressure on profits, as Intel seeks new places to put its chips.

In a call with financial analysts on Thursday, Stacy J. Smith, Intel’s chief financial officer, said Intel would invest in chips for “things like the data center, tablets, low-power systems on a chip.” Those systems enable chips to perform several functions in a small space. He added, “There’s going be a significant shift in investment over the course of the year.”

The employment cuts, which the Intel official said were part of a larger program to shift resources to growing business lines, appeared to sit well with Wall Street.

Intel shares, which fell about 5 percent in early trading on Friday, recovered toward the end of the day as word of the job cuts began to circulate. The stock closed at $25.85 a share, down 2.6 percent, or 69 cents.