Intel Corp. plans to lay off between 15% and 20% of the investment directors at Intel Capital, sources tell VCJ. Intel Capital currently has about 200 employees.
Intel Capital spokesman Kent Cook refers to the pending layoff action as an “efficiency program,” and confirmed that the group’s hierarchy is developing a skills assessment that will be used to evaluate current employees. “The skills assessment involves what capabilities we want the investment directors to possess, and if the people we have properly fit the bill,” Cook says. “For certain people, it may just mean additional training.”
Intel Capital CEO Arvind Sodhani created the “investment director” position earlier this year. Previously, Intel Capital staffers either were “strategic investors” (i.e. deal sourcing/due diligence) or “treasurers” (i.e. term sheets, financial matters). The layoffs are expected to be on a person-by-person basis, although the former “strategic investors” seem to have proven more adept at the new generalist role.
The skills assessment involves what capabilities we want the investment directors to possess, and if the people we have properly fit the bill.
Kent Cook, spokesman, Intel Capital
The layoffs are part of a larger restructuring at Santa Clara, Calif.-based Intel Corp., whose leading market share has been narrowed by rival chipmakers, such as Advanced Micro Devices. In a response to Wall Street’s complaints about the chipmaker’s declining profits, Intel Corp. CEO Paul Otellini announced in late April that he was launching a “wholesale” company review aimed at cutting $1 billion in costs. “We are very well aware of the realities of our current and future business outlook and we are taking actions to address these realities,” Otellini then told securities analysts. “No stone will remain unturned. We will restructure, resize and repurpose Intel for the future.”
Wall Street applauded Otellini’s remarks. However, Intel Capital watchers sounded the alarm and wondered how the VC unit would be affected. In May, Sodhani predicted growth for the investor. Indeed, the VC unit has remained an active investor this year and was involved in the $8 million Series C round announced last week for Mobixell Networks, a provider of a mobile Internet platform for wireless operators. —Dan Primack