Intel's New Office

The chipmaker picks three U.S. offices for a redesign program aimed at improving productivity, boosting morale, and cutting costs

by Olga Kharif

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Intel (INTC) employees have long complained about their drab office surroundings, but it took Conan O'Brien to spur change. This spring the comedian had a good laugh on his late-night TV show when he broadcast footage of his tour through the depressing 1970s-era gray cubicles at Intel's Silicon Valley headquarters—complete with support columns numbered just like a parking garage (C14, F8, H10, etc.).

Touching a gray wall, with gray trim that flows into a blue-gray carpet, O'Brien deadpanned, "I love what you guys have done with the color here. I think the gray looks very nice with the gray and works very well with the grayish blue." Then, proceeding to navigate through a sea of gray cubicles, O'Brien muttered, "This is good.… There's no individuality. There's no hope."

The segment garnered more than 50,000 viewings on YouTube. And it likely sped up work on Intel's office redesign, a project the company had been mulling for months but had yet to green-light. Alas, an office design that was hip and forward-thinking years ago—Intel was the first company to put all its employees, including the chief executive, into cubicles—had become woefully out of date.

"Intel led the cubicle revolution in the 70's. It helped feed our innovation at the time," says Intel Chief Executive Paul Otellini. "Today, collaboration is deeper, wider and less constrained by physical limits. I believe it is time to bring our physical environment in synch with our needs for real time person-to-person collaboration."

Lounge Act

To update its offices, the chip giant plans to spend $10 million on a three-month pilot program to redo work spaces in three facilities—one each in California, Oregon, and Arizona. Its goal: to improve productivity, boost employee morale, and cut costs.

As part of the project, between 25% and 50% of Intel's 1,150 lawyers, marketers, and engineers working in these buildings will give up their assigned cubes. Instead, they will store their personal belongings in lockers and grab desks, whiteboards, and overstuffed armchairs in more colorful, Starbucks-like common areas on a first-come-first-gets-the-space basis.

To make private calls, these laptop-brandishing office wanderers will use glass phone booths, with space for up to four people, or jockey for conference rooms—not available for advance booking. Each floor will also feature a break room with a kitchen area and free coffee and soda. Nearby, employees will sit in a bar-like setting around a large plasma TV hanging off a curved, colorful wall. Of course, there will be plenty of outlets and Web connections available for anyone who wants to bring their laptops along. "It will be like walking into an airport lounge," says Neil Tunmore, an Intel human resources director in charge of the redesign.

Hip to Be Sparse

Intel is trying to play catch-up to its hipper Silicon Valley neighbors including Google (GOOG), whose Googleplex features high ceilings, glass partitions, and fun colors (not to mention a piano in the lobby). Google's offices have long presented a lure for job applicants that Intel's lacked. Naturally, the younger Google was able to create its work spaces from scratch. Intel, however, is at the forefront of established American corporations—the old guard that's been around for decades and is now trying to bring its office spaces up to modern times.

The key is in not changing too much, too quickly. Some Intel employees will stay in assigned cubes, but those will lack windows and will be surrounded by 52-inch-tall cream-colored partitions, more than a foot lower than the current, gray ones. The dimensions of the cubes will also shrink by a third, into an 8-ft. by 6-ft. space, and become sparser: A typical office will feature a small modern desk of light maple with metal accents, a chair, and a two-drawer file cabinet on wheels that will be topped off with a pad, to double as a guest chair.