One of the Republic's biggest private-sector employers intends to cut staff numbers by 200 over the next three months.

Microchip manufacturer Intel told workers yesterday that it was seeking 200 voluntary redundancies by the year's end.

The company issued a statement saying that it plans to axe the 200 jobs through a voluntary programme that it began offering workers yesterday.

Intel, which is the largest producer of microchips in the world, which are used to power computers, mobile phones and other high-tech devices.

Last week, it predicted that its sales for the three months ending this month could hit $9.8 billion (€7 billion).

The company employs 5,500 workers at its facility in Leixlip, Co Kildare, on the outskirts of Dublin, making it one of the biggest private-sector employers operating in the State.

Both the Government and development agency IDA Ireland have described it as "a strategically important" investor and employer, and the latter has backed its expansion here with grants worth millions of euro.

The US-headquartered company has cut jobs across its worldwide operations in the past, but this is the first time that it has sought to cut its Irish workforce.

Intel Ireland chief executive, Jim O'Hara, said that the company wanted to cut numbers at the Kildare plant to boost competitiveness.

However, he stressed that Intel still has a long-term commitment to the Republic.

"We are all committed to ensuring our success in the long haul," he said.

The job cuts will come in its fabrication or manufacturing areas as well as in the support services area.

The company is offering six weeks pay for each year of service, in addition to statutory entitlements to anyone who leaves. Yesterday's announcement in Kildare came just hours after Intel's group chief executive, Paul Otellini, unveiled new technology in San Francisco that it plans to begin producing next year.

The Leixlip plant will not manufacture this new product, as it successfully bid to manufacture the group's current technology.

The multinational's strategy is to launch a new product every two years.

The Irish plant will compete with other group facilities to manufacture future generations of Intel's processors. It already has planning permission needed to facilitate any expansion at the site.

In 2005, it was chosen as a manufacturing site for the current generation of Intel microprocessors, which resulted in a €2 billion investment at the plant.

The IDA had intended supporting this with a €170 million grant, but the EU blocked this on the grounds that it constituted an illegal State aid.

An IDA spokeswoman said yesterday that the agency did not regard the 200 lay-offs as serious.

Where multinational companies cut jobs created with the help aid of IDA grants, the agency can demand repayment of some or all of the money involved.

The IDA spokeswoman said that it would not know if it would be seeking any repayments until Intel reaches the end of the redundancy programme and the agency's legal staff have reviewed it.

She pointed out that the company received several grants to support different rounds of job creation.

In recent years, Intel has faced increasing pressure from one competitor in particular, Advanced Micro Devices, which some pundits believed was going to win out over its bigger rival.

However, last year, Intel cut around $5 billion from expenses and pledged to launch a new, smaller, cheaper and faster processors every second year.