Intel reorg hits home in Hudson

Intel’s reorganization continues. The chipmaker, which said it would cut 10 percent of its workforce—about 10,500 jobs—by mid-2007 as part of an effort to save money and become more agile and efficient, has been reworking its operation in Hudson, Mass., according to a new report in today’s Worchester Telegram & Gazette. About 100 of Intel’s Hudson employees have already transferred to new digs at Marvell, which purchased a portion of Intel’s XScale processor business in November, according to the Gazette story. But Intel is also shifting other Hudson employees, including members of its storage group, to other areas. Some layoffs will result, the paper says.

Thus far, job cuts and other actions, including selling XScale to Marvell, have touched just about every part of Intel. They have touched its management ranks, its research and development staff and its manufacturing operations. Reports coming out of South Korea on Friday said that Intel is closing its research and development lab there, which focused on digital home technology, in another new example of the reorganization.

Intel’s Hudson operation represents an interesting footnote for the chipmaker and for computer historians as well. Intel gained the Hudson facilities, which include a manufacturing plant built by Digital Equipment Corp. to fabricate its Alpha processor, in the settlement of patent suit levied against it by DEC. DEC charged in the May 1997 suit that technology inside Intel’s Pentiums violated DEC patents. The suit was settled in October 1997. As part of the settlement, the companies cross-licensed their patents, Intel paid up and DEC agreed to use Intel's then forthcoming Itanium chip. Aside from gaining the fab, Intel also took ownership of StrongARM—a DEC processor created for embedded and useful in products such as handhelds—in the process.

StrongARM went on to become Intel XScale and to power some versions of the famous BlackBerry, while Alpha, which outperformed Intel chips at its peak, has been gradually winding its way toward becoming another computer history footnote. Hudson became a hub for Intel’s communications chip operation, given its focus on XScale. Intel also used the Hudson fab to produce Pentiums. More recently, it switched the fab to produce PC chipsets using a 90-nanometer process. (The Worchester Telegram story mentions that that the plant also fabricates processors, but to the best of my knowledge it no longer does so.) And, although it’s reducing its workforce there, Intel will continue operations in Hudson. Intel Hudson had about 2,400 employees prior to the workforce actions and the sale of XScale. My guess is it will continue with around 2,000 workers.