Plans to shift to higher-growth areas.
Intel, the world’s biggest maker of semiconductors, will cut 12,000 jobs, or 11% of its workforce as part of a global restructure. The job cuts will be completed by mid-2017 through site consolidations, voluntary and involuntary departures, and a re-evaluation of programs.
Shipments of PCs, a market that provides Intel with almost 60% of its sales, fell to their lowest level in a decade in the first three months of 2016. Therefore, Intel plans to increase investments in its data center, Internet of Things (IoT), memory and connectivity businesses, as well as growing client segments such as 2-in-1s, gaming and home gateways.
In a company statement, Intel said the focus in high-growth areas will position the company for long-term leadership, customer value and growth, efficiency and profitability.
The data center and Internet of Things (IoT) businesses are Intel’s primary growth engines, which delivered $2.2 billion in revenue growth last year, and made up 40% of revenue and the majority of operating profit.
An e-mail to employees by Intel CEO Brian Krzanich read:
“Our opportunity to accelerate our momentum and build on our strengths requires some difficult decisions. We are announcing a restructuring initiative that will allow Intel to intensify our investments in the products and technologies that fuel our growth, and drive more profitable mobile and PC businesses.
“We expect that this initiative will result in the reduction of up to 12,000 positions globally. The majority of these actions will be communicated over the next 60 days, with some spanning into 2017.
“We are deeply committed to helping our employees through this transition and will do so with the utmost dignity and respect. Today’s announcement is about driving long-term change to further establish Intel as the leader for the smart, connected world. We will emerge as a more productive company with broader reach, and sharper execution.”