Intel (INTC) announced plans Tuesday to cut its workforce by 12,000 people, 11 percent of its current headcount. Such a massive, top-down layoff by any corporation always makes me wonder what’s wrong with the company. Certainly circumstances change and reductions in workforces are required. But why not a few hundred last week, another hundred next month, in a gradual process that has a similar result? 

The proximate cause of the layoffs, according to the CEO’s employee memo, is the shift from personal computers to cloud and mobile devices. CEO Brian Krzanich said that he had been working on the transition for three years, so it was no surprise. The specific timing and magnitude of market shifts may have been different from internal projections, but the general trend has been well known for quite a while.

Go back three years and ask why Krzanich was keeping all of those 12,000 people on the payroll. Or go back three months and ask the same question. The boss might well have said something like, “We’ve been ramping down our headcount; now we’ll move faster because markets changed more rapidly than we had expected.” But that’s not what happened. The sudden, massive layoff looks (at least to this outsider) as if management had been in denial or had failed to take the unpleasant steps it knew it needed to take.

(Intel did lay off some workers last year, in what the local newspaper called “semi-secret layoffs.”)

Intel is certainly not the only example of massive layoffs. Four years ago I wrote “HP Layoffs a Sign of Bad Management” quoting my old book Businomics:

“The massive staff reduction really signals that management failed to do its job in the good times. If, in fact, the business is better off without these staff members, then they should have been pruned back gradually in the good times. In this context, senior managers can make clearer judgments about which functions are overstaffed and which functions are adequately staffed, or even understaffed.”

Can someone leading a 110,000 person organization know that he needs to dismiss 12,000 people? Should it be 11,000 layoffs or 13,000 layoffs? The CEO doesn’t know. Down the org chart executives should be able to cut expenses in departments, and department managers can determine how many people to let go. In some cases, it makes sense for senior management to terminate or sell whole divisions. But a massive layoff implies knowledge that the top leaders simply don’t have.

What should Intel have done instead? As I was researching my latest book, The Flexible Stance, I called the CEO of a business with very volatile sales and asked how he coped with uncertainty. He told me that he had just been reviewing a report about one of his overseas operations and saw that sales had dropped sharply and the new business pipeline was very light. He checked staffing for the division and saw that headcount was already headed down. The company had developed a management culture of fast response to changing market conditions. As CEO he reinforced this culture, but the people lower in the organization—who best knew local conditions—took the action steps needed to maintain profitability.

One could argue that a tech company like Intel should avoid layoffs to promote an image of being a good employer. However, the company has gone through boom and bust repeatedly over its history. It reduced headcount by 30 percent in the 1974 recession, six years after its founding. Intel has been buffeted by recessions and technology shifts many times.

I am not an Intel specialist, but as an Oregon economist I watch our state’s largest private sector employer. (It has 19,500 workers in the Portland metropolitan area.) Intel is a survivor, with lots of really talented people. The company will survive, but this announcement is a sign that management is not as sharp as it should be.