Intel winding down Xircom subsidiary

Intel is winding down its Xircom networking subsidiary, part of the chipmaker's strategy to concentrate on its basic markets. Intel is in the process of closing its Thousand Oaks, Calif., offices, the former Xircom headquarters, and is "redeploying" the people that work at those offices, an Intel representative confirmed. In redeploying, workers continue to get paid for a few months and can seek jobs elsewhere in the company. If they can't find new jobs, the employees are let go. Internal hiring right now is tight, the representative added.

Xircom specializes in PC networking cards for mobile computers. Intel bought the company in January 2001 for $748 million. Rather than integrate Xircom into the main company, Intel turned it into a subsidiary. At the time, Xircom employed 1,900 people and had achieved revenue of $492 million over the previous four quarters.

The tech downturn, however, was just kicking in. Intel--which acquired 35 companies, for $11 billion, between January 1999 and December 2001--started cutting jobs and shutting down lackluster business units soon after buying Xircom.

In August 2001, Intel put Rex, the credit-card-size organizer from Xircom, to sleep.

In recent weeks, Intel has sold off other acquisitions, including the Shiva networking group and Trillium Digital Systems. Many of the acquisitions, and subsequent closures and spinoffs, came out of Intel's Communications Group.

Despite the pending demise of the Thousand Oaks offices, not all traces of Xircom will disappear. Researchers, employees and technology from the acquisition will remain at Intel, the representative said.