Chipmaker Intel has announced is to shave 10,500 jobs by next year as part of a restructuring that will cut $2 billion (€1.56 billion) in annual costs in 2007, but few Irish jobs are expected to be affected.

"It would be expected that the restructuring would have a very minimal effect on our side," said an Intel Ireland spokeswoman. However, Intel will not break out how individual operations in different geographies will be affected, she said.

The announcement of the cuts and other restructuring measures came in a webcast speech to employees made by Intel chief executive Paul Otellini yesterday afternoon. He was briefing Intel staff on the results of an internal report commissioned last spring, after Intel disclosed its largest profit loss in four years.

While the 10,500 figure matches the minimum number of job cuts predicted by analysts, the severity of the redundancies is less than expected because the figure includes 5,500 positions that have already been trimmed since disappointing second quarter results last April. The spokeswoman said the positions already shed globally include 1,000 management jobs announced in July, another 2,000 from the sale of two business units, and "natural attrition".

A further 2,500 jobs will be cut this year, she said, primarily in marketing and information technology areas, and again due to natural attrition. Ireland is unlikely to be significantly affected by the first set of cuts because operations here do not include marketing positions.

Most Irish jobs are in the core areas of chip, chipset and flash memory manufacture, with some additional research and development positions.

Intel said it would cut a further 3,000 jobs next year, and these would come from across the company. Irish job losses would most likely come in the second tranche of cuts but are not expected to be significant, said the spokeswoman.

Ireland has emerged relatively unscathed during past job cuts, primarily because Irish operations have been regularly expanded to include the firm's latest manufacturing processes for its most current chips.