Business briefs: Intel plans to cut 5,000 jobs
SAN FRANCISCO – Intel plans to trim more than 5,000 jobs from its workforce this year in an effort to boost its earnings amid waning demand for its personal computer chips.
The Santa Clara, Calif., company confirmed the job cuts Friday, the day after Intel Corp. reported its profit and revenue had fallen for the second consecutive year.
The purge represents about 5 percent of the roughly 108,000 jobs that Intel had on its payroll at the end of December.
Intel needs to pare its expenses if it hopes to end a two-year slump that has seen its earnings fall from $12.9 billion in 2011 to $9.6 billion in 2013. Intel is forecasting its revenue this year will be about the same as in 2013, making it unlikely its profits can rise without cost cuts.
Intel’s financial performance is faltering because the company didn’t adapt quickly enough as the growing popularity of smartphones and tablet computers undercut sales of PCs running on its chips. Worldwide PC sales have dropped from the previous year in seven consecutive quarters, an unprecedented decline.
The trend is a problem for Intel because most mobile devices don’t rely on its processors.
Intel’s stock dropped 69 cents Friday to close at $25.85, then dipped another 4 cents in extended trading.
Jos. A. Bank rejects takeover
Jos. A. Bank Clothier Inc. has rejected a $1.61 billion takeover offer from rival Men’s Wearhouse.
The two men’s clothing retailers have been engaged in a strange courtship for months.
Jos. A. Bank made a bid for Men’s Wearhouse Inc. last year that was rejected.
Men’s Wearhouse then turned the tables and made a bid for Jos. A. Bank that was denied in December. It then raised the offer to $57.50 per share from $55 per share. But Jos. A. Bank said Friday that the offer is still too low and not in the best interest of shareholders.
Men’s Wearhouse plans to take the deal directly to shareholders, and Jos. A. Bank is urging shareholders to reject the offer, saying it significantly undervalues the company’s potential.
New GM CEO’s base salary set
General Motors Co. says new CEO Mary Barra will get a base salary of $1.6 million per year as she takes over the global automaker.
GM said in a filing on Friday that Barra will also be eligible for $2.8 million in short-term incentives.
Her pay would climb further if GM shareholders approve a new long-term incentive plan at their next annual meeting. Stock and option awards make up the bulk of CEO pay at GM and many other publicly traded companies.
Dan Akerson, who retired as CEO Wednesday, had total 2012 pay of more than $11 million. That included a base salary of $1.7 million and $9.3 million in stock awards.
The federal government limited executive pay at GM after the Detroit company took bailout money in 2008 and 2009. But those restrictions are gone after the government sold the last of its General Motors Co. stock on Dec. 9.
Barra started as CEO on Wednesday. She has worked at GM since she was 18, and got an engineering degree from what was then known as General Motors Institute. Most recently she held what is widely considered to be the most important job at GM: senior vice president for global product development. She has also been a plant manager, executive director of engineering and head of human resources.