Today: Intel (INTC) expands on statement that it will reduce workforce, stock declines after chipmaker discloses profit and revenue declines in 2013 and forecasts little change in 2014.

The Lead: Intel stock falls after chipmaker confirms layoffs, stagnant 2014 forecast

Intel said Friday that it would cut about 5 percent of its workforce in 2014, an announcement that arrived one day after the Santa Clara chipmaker detailed a financial decline in 2013 that is not expected to improve this year.

During a conference call Thursday evening to discuss the company's financial results, Chief Financial Officer Stacy Smith disclosed that Intel would be "bringing down employment" in 2014; the company went into greater detail Friday, confirming with Mercury News reporter Steve Johnson that it would be shedding about 5 percent of its global workforce of 107,000 employees, or about 5,350 workers.

While confirming the cuts, Intel spokesman Chris Kraeuter would not disclose more information about them Friday, such as where they would occur, saying only that Intel is "realigning and refocusing our resources" in response to the evolving chip market.

In an interview Thursday evening with Barron's, Smith also avoided giving more detail about Intel's job cuts, instead focusing on "shifting of investment."


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"We have a long history of redeployment of resources, and we will be making significant new investments in data center, and tablets and low-power (systems on a chip) and the Internet of things," Smith said.

Intel has long focused on the personal-computer market, which reportedly suffered its largest declines in history in 2013. Silicon Valley PC stalwart Hewlett-Packard (HPQ) is also undergoing a large round of job cuts, increasing the total by 5,000 at the end of 2013 for a total reduction of 34,000 in a time frame of a little more than two years, ending in October 2014.

Despite HP's layoffs, Bay Area job growth seemed strong in 2013, with additions growing toward the end of the year. In the first seven months of the year, the Bay Area added an average of 2,400 jobs a month, but that average grew to 10,400 a month in the past four months for which data has been provided by the state's Employment Development Department, a period that ends in November. December figures are due to be released later this month.

Intel shares declined 2.6 percent to $25.85 Friday, with shares receiving a noticeable bump in the last hour of the session, after the layoff news became public. Investors still kept the price higher than the level Intel traded at for much of the second half of 2013, as analysts attempted to parse the company's earnings report, which showed revenues and profits declined in 2013 and predicted a similar performance in 2014.

Analysts were not eager to drastically change their ratings or price targets on Intel after getting a look at the company's financials, instead using the information to underscore their previous assessment of the company, whether bull or bear.

JPMorgan's Christopher Danely, who took a "leap of faith" in the PC market earlier this week while upgrading Intel and boosting his price target on the chipmaker's stock, stuck to his guns Friday and bumped his price target up another dollar to $30.

"One of the reasons we upgraded Intel was due to our belief that its new CEO would provide realistic guidance, and we believe its conservative outlook adds credence," Danely wrote.

Bernstein Research analyst Stacy Rasgon, meanwhile, stuck to his "Underperform" rating and $18 price target, writing that Intel's report and conference call offered "very little to defuse the structural bear thesis, but did have plenty of fodder to begin sowing doubt on the bullish enthusiasm that has collected around the stock as of late."

SV150 market report: Stocks fall, but Electronic Arts and Twitter gain

Wall Street indexes tumbled Friday, and SIlicon Valley stock suffered even more as Apple (AAPL) and Google (GOOG) joined Intel in declines. Not all the news was bad, however, as Electronic Arts (ERTS) skyrocketed higher and Twitter gained despite the loss of an important executive.

EA jumped 11.9 percent to $24.10 after good news on game sales as well as video game hardware sales, and an upgrade from CRT Capital. NPD Group reported Friday morning that video-game hardware sold at its highs level in three years in December, thanks to the introduction of the Xbox One and PlayStation 4, which portends well for future sales from Redwood City-based EA. The company is already realizing profits from that move, as its "Battlefield 4" offering hit No. 2 on the video game charts in December, according to NPD. CRT analyst Neil Doshi wrote that EA should continue to realize strong sales, with the upcoming World Cup boosting its "FIFA" line of soccer games, as well as another title releasing soon. "Video game stocks trade on game slates, and we believe that EA has one of the most highly anticipated games coming out at the end of March, 'Titanfall,'" he wrote.

Twitter's roller-coaster ride on Wall Street headed back up after Stifel Nicolaus initiated coverage with a "Buy" rating and $75 price target, with analyst Jordan Rohan writing, "Twitter is the most powerful, flexible, and disruptive of the social media platforms." Twitter's gains settled down in the afternoon, however, after its vice president of products announced he was leaving the company, leading to a 2.6 percent gain to $62.20. Other prominent social-networking companies were not as fortunate, as Facebook dropped 1.6 percent to $56.30 and LinkedIn fell 4.6 percent to $219.93.

The SV150 declined at a faster rate than larger indexes as its most valuable company, Apple, declined 2.5 percent to $540.67 as the iPhone launched on the world's largest wireless carrier. Google sank 0.5 percent to $1,150.53 after announcing late Thursday that it will offer a connected contact lens that measures wearers' glucose levels. Yahoo (YHOO) fell 0.8 percent to $40.01 while reportedly seeking new board members in the wake of the costly dismissal of the Sunnyvale company's chief operating officer. Redwood City cleantech company Silver Spring Networks plummeted 24.7 percent to $17.69 after preannouncing a big earnings miss, and other cleantech companies regressed after Thursday's big gains: Tesla Motors (TSLA) fell 0.6 percent to $170.01, SolarCity declined 2.2 percent to $75.11 and SunPower (SPWRA) dropped 3.3 percent to $33.99.

Up: EA, NetApp, Twitter, Yelp, Salesforce, SanDisk, Juniper, HP, Symantec, Gilead, Splunk, Zynga, Intuit

Down: LinkedIn, AMD, SunPower, Intel, Apple, SolarCity, Pandora, Workday, Facebook, VMware, eBay (EBAY), Yahoo, Tesla, Netflix (NFLX), Google, Applied Materials, Nvidia, Adobe

The SV150 index of Silicon Valley's largest tech companies: Down 13.34, or 0.87 percent, to 1,522.87

The tech-heavy Nasdaq composite index: Down 21.11, or 0.5 percent, to 4,197.58

The blue chip Dow Jones industrial average: Down 41.55, or 0.25 percent, to 16,458.56

And the widely watched Standard & Poor's 500 index: Down 7.19, or 0.39 percent, to 1,838.7

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.