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Intel cuts 650 from PC plant

The chipmaker will lay off up to 650 workers at a Washington facility, the first concrete example of some of its expected layoffs.

Intel will lay off up to 650 manufacturing employees at a Dupont, Washington, facility, the first group of some 3,000 positions the company expects to trim from its rolls over the next five months.

In August, Intel will begin phasing out its PC and server computer manufacturing operations in Dupont, where the company completes the assembly of chips, hard drives, and other components. Intel does not sell these products under its own name, but markets them to third-party vendors who brand them independently.

Customers include Dell and Sony, as reported by Tacoma, Washington's News Tribune.

Intel will continue manufacturing these products, a spokesman said, but will complete its transition to using subcontractors by January 1999, when the layoffs are completed. The company does not have another such facility, he said.

"It's not cost-competitive to maintain this internal capability," said the spokesman, who noted the undertaking is principally intended to "accelerate the adoption of the Intel architecture in the marketplace."

The planned layoffs are part of the personnel reduction the company announced in April in conjunction with its first-quarter earnings report. At the time, Intel said it needed to reduce head count by five percent, or 3,000 employees. To get to that point, certain positions and departments were to be targeted for consolidation, Intel executives said.

The company said it would offer affected employees the opportunity to apply for other company jobs. For the Dupont employees, the company has also prepared severance packages that include four months' salary and medical benefits, the spokesman said.

The remainder of the currently 1,800-strong Dupont facility will be unaffected. One of its principal functions is research and development on workstation and high-end server products. "We will continue to grow the site for engineering and business management" products, the spokesman said.

A third building on the Dupont site which Intel has been constructing will not be immediately occupied, he said.

Intel is an investor in CNET: The Computer Network.