Intel spokesman Bill Calder said the decision was made as part of an effort by the company to focus more on selling communications chips and letting other companies make complete systems as well as an overall effort within Intel to refine its focus. The move is also part of the company's effort to cut 5,000 jobs.
"We're no longer going to invest in (developing) new switching and router systems," Calder said. "We will continue to support existing customers and ship existing product for a period of time."
The decision will lead Intel to wind down operations at the Denmark facilities where the switches and routers were designed. The company will continue to sell specialized e-commerce servers such as load balancers and chips for networking gear.
Calder said employees were notified of the decision Tuesday, and affected workers will be allowed to look for other jobs within Intel and be offered career assistance and severance packages.
"We certainly acknowledge that will be difficult," Calder said. "Particularly in Denmark."
Intel has other operations in the Scandinavian country, including an optical chip unit that stems from its acquisition last year of Giga A/S.