|Blair Miller and Caleb James
Updated: 04/20/2016 8:18 AM
Created: 04/19/2016 2:44 PM
Intel Corporation announced Tuesday it will cut up to 12,000 positions globally by mid-2017 as it restructures its company away from PC-related innovation, which could greatly affect jobs at its chip manufacturing plant in Rio Rancho.
The 12,000 jobs would be approximately 11 percent of its global workforce. In a news release, the company said the jobs would be cut through site consolidations, voluntary and involuntary departures and a “re-evaluation of programs.”
Intel said it would inform employees who will lost their jobs over the next 60 days, though it said some cuts would come next year.
The company says it will transition from a PC-focused company to primary cloud-based functions by focusing on its data center and “Internet of Things” businesses, which added $2.2 billion to the company, or 40 percent of its revenue, last year.
“We saw ongoing declines in the PC camp, particularly in China and other emerging markets, which led to greater-than-anticipated reductions in worldwide PC supply chain inventory,” CEO Brian Krzanich said at an afternoon webcast. “We are evolving from a PC company to a company that powers the cloud and billions of smart-connected and computing devices.”
The company said the changes will save the company $1.4 billion by mid-2017.
It’s unclear exactly how many jobs could be lost at the Rio Rancho plant.
Last year, the workforce at the Rio Rancho plant sat at around 2,300 people just before a batch of expected layoffs that happened in June and July. It’s unclear how many people were laid off in that round.
However, on Tuesday, a spokesperson for the Rio Rancho plant said the company currently employs around 1,900 people, meaning about 400 people were laid off last year.
The company had more than 5,000 employees at the Rio Rancho plant 10 years ago.
A round of layoffs that hit the plant in 2013 initially cost 400 employees their jobs, and 600 more were laid off in the months after.
The company laid off hundreds of workers at the company’s Chandler, Arizona campus last June.
The company said it will incur a one-time charge of $1.2 billion in the second quarter related to the restructuring and job cuts.
When asked about the possible layoffs at a Tuesday news conference, Gov. Susana Martinez said she did not know if there would be any at the Rio Rancho plant.
The city of Rio Rancho said it would not comment on possible layoffs since it had not received any specific numbers at the Rio Rancho plant.
INTEL BROUGHT RIO RANCHO UP FROM QUESTIONABLE ROOTS
Some people credit Intel for Rio Rancho’s birth, but a step back in time reminds us the City of Vision began long before the chip-maker ever came onto the scene.
Rio Rancho’s story began about 20 years before Intel came to town. But the company was a Godsend in a lot of ways — a savior for a struggling community in the desert.
An old photo depicting 1970s Rio Rancho sits in the National Archive — it’s a tale of times long past — of a city born in the middle of nothing.
“I spoke to your wife earlier, I’m in town about Rio Rancho,” a pestering Jack Lemon begins a fevered sales pitch in the 1992 movie Glengarry Glen Ross.
The town’s early years were immortalized in the film, which thinly veiled Rio Rancho as a development in Nevada.
In real life, the town started as a massive land grab by New York developers AM-Rep in 1961.
In 1961, Rio Rancho Estates, Inc. purchased an estimated 55,000 acres as an investment.
Throughout the 1970s, the group used high pressure sales tactics to market a dreamlife in Rio Rancho.
Pushy salesmen worked to convince east coast families to invest in properties that were rarely developed as promised, and quickly bled value.
An AM-Rep rendering of Rio Rancho makes things look a little more ideal than reality.
The company was targeted with lawsuits and inspired the movie that highlighted Rio Rancho’s seedy start.
A lot of people credit Intel with building Rio Rancho, but the company doesn’t come into the picture till 1981. In a lot of ways, Intel saved an already struggling community.
It started with the first Intel fabrication plant, opened in 1981. It grew into an economic force in the Albuquerque-Rio Rancho area, with its revolutionary and state of the art facilities — the Intel Rio Rancho facility produced some of the nation’s leading technology.
By 2000, Rio Rancho boasted 19,000 jobs, many of which were provided by Intel.
In 2002, at the height of production, Intel opened its newest Rio Rancho fabrication plant and suddenly injected the region with thousands more jobs. The city flourished.
“As any cut would, it will impact us,” said Nyika Allen from the New Mexico Technology Council.
Now Rio Rancho’s mission for Intel is winding down.
Allen says the technology produced at its facilities in Rio Rancho may have shaped the community, but things have changed.
“I think luckily these people will not having any problem finding jobs,” said Allen. “We have about 3,000 positions open in Albuquerque specifically for tech-related positions. So I think people will easily transition from their job at Intel to another manufacturing facility or high-tech plant.”
But the future may hold some potential for Rio Rancho and Intel to continue its relationship in some ways. The possibility the facility may be used to develop new technology is always there, and we will likely learn more about the plant’s new role soon.