Intel Sells Optical Networking Biz to Cortina

A week after announcing 10,500 layoffs in a complete corporate reorganization, Intel has continued to trim the company, selling off another division. Intel sold its optical networking components division on Friday to Cortina Systems, a maker of communications chips for telecommunications carriers.

The sale will allow Intel to focus better on its core products—PC chips, network processors, modular communications platforms and optical modules, Intel said Monday. Financial details of the sale were not disclosed, although some published reports put it at US$115 million.

While the sale shrinks Intel to a smaller size, it won’t necessarily result in more layoffs. Cortina, based in Sunnyvale, Calif., plans to employ “a significant number” of the engineering, operations and marketing employees in the division.

Intel Chief Executive Officer Paul Otellini began the corporate restructuring in April, when he told analysts that the company would earn $9.3 billion for 2006, down from $12.1 billion in 2005. Since then, he has sold off two other business units, laid off 1,000 middle managers, shuffled top executives, and announced a plan to shrink the company from 102,500 people in the second quarter of 2006 to 92,000 people by the middle of 2007.

The sale of the optical networking components division could add to the number of jobs lost. Intel did not specify how many workers it employs in that division, but the number is reportedly 120.

-Ben Ames, IDG News Service (Boston Bureau)

Related Link:

• Intel Announces Layoffs, Reorganization

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